By Alvin C. Monshower, Jr., Esq.
Can a real estate brokerage company which operates under a franchise banner engage a real estate licensee from a different real estate company who operates under the same franchise banner?
Although the two real estate companies may operate under the same franchise banner, they, in fact, are separate business entities which happen to share a common franchise license but, nevertheless, are independently owned and operated under different names and with different brokers.
The two real estate brokerage companies–albeit sharing a common franchise license–does not change the fact that they are separate and distinct real estate brokerage companies operating under two separate brokers and with different entity names appearing on the wall license of those licensees affiliated with the franchise company.
Accordingly, to remove any further doubt regarding this matter, a licensee affiliated with a franchise broker may not sit at or conduct an open house for a listed property with another real estate brokerage company, even though they belong to the same franchise, since to do so would impose serious legal consequences.
The consequences are severe with respect to not only the licensees involved, but also the brokers and managers and, under new Maryland law, the team leaders who are charged with providing reasonable and adequate supervision over licensees affiliated with them.
This practice imposes not only multiple violations of the Real Estate Brokers Act, for which a license could be suspended or revoked and/or a $5,000 civil penalty imposed for each violation, but also raises the specter of a criminal misdemeanor under Maryland law.
(This article is intended to be a general discussion of the topic. As with all legal matters, the reader should consult with competent legal counsel regarding any actual situations or questions.)
©2012 – Alvin C. Monshower, Jr., P.A.
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