Oregon Broker PSI Practice Exam

If a principal real estate broker establishes an independent contractor relationship, what is required?

1. No supervision is required

2. The individual must have a separate office

3. The principal broker must supervise the activities of the broker

4. The broker must handle their own marketing

The correct answer is: The principal broker must supervise the activities of the broker

When a principal real estate broker establishes an independent contractor relationship with a broker, it is essential for the principal broker to provide some level of supervision over the activities of the broker. This supervision is necessary to ensure compliance with state laws, regulations, and the ethical standards of the real estate profession. Even though independent contractors have more autonomy in their work compared to employees, the overseeing principal broker is responsible for ensuring that the conduct of their independent contractors aligns with industry practices and legal guidelines. This includes monitoring transactions, providing guidance on professional practices, and ensuring that the independent contractor adheres to the policies set forth by the brokerage. In contrast, the other options present situations that do not accurately reflect the requirements of an independent contractor relationship. For instance, while independent contractors might manage their own marketing, it doesn't negate the necessity for oversight from the principal broker. Similarly, having a separate office isn't a requirement tied to the independent contractor status or supervision level, and the notion that no supervision is required overlooks important regulatory responsibilities that brokers hold. Proper supervision is key to maintaining standards within the brokerage and protecting clients' interests.