The PSI broker exam adds items on supervising agents and managing a firm (national N-X-D and Virginia licensing/escrow). A salesperson can practice only under a broker; a broker license is what creates the duty to supervise.
Who is responsible
- Principal broker
- The individual designated to ensure the firm's compliance with Chapter 21 and Board regulations, receive Board notices, and hold signatory authority on escrow.
- Supervising broker
- A broker designated to supervise associate brokers and salespersons at a branch or on a team, or to supervise a designated agent.
- Associate broker
- A broker licensee who is not the principal broker and still practices under that principal's supervision.
- Place of business
- The firm's licensed location. Branch offices need their own license and a designated supervising broker.
What supervision covers
- Advertising: firm name and office contact must appear; no blind ads.
- Contracts and agency: review files, brokerage agreements, and dual/designated-agency consents.
- Escrow: labeled federally insured accounts, fifth-business-day deposits, and a balance that always covers client funds.
- Unlicensed assistants: administrative work only; they may now be paid per transaction, but they cannot negotiate or show as if licensed.
- Transfers and status: a licensee who changes firms must process the transfer with the Board; inactive licensees cannot practice.
- Records: keep transaction records (typically three years) available for Board inspection.
Exam trap: independent-contractor tax status does not remove license-law supervision. The principal broker can be disciplined for an associate's escrow or advertising violation if supervision was inadequate. Broker CE includes 8 hours of supervision/management (2 hours on Board supervision rules).