Oregon Broker PSI Practice Exam

What role does a principal broker have concerning the activities of their associates?

1. They provide moral support

2. They must supervise certain activities

3. They can ignore the actions of associates

4. They delegate all responsibilities to subordinates

The correct answer is: They must supervise certain activities

A principal broker plays a crucial role in ensuring that their associates operate within legal and ethical standards. This involves supervising the activities of associates to make sure they comply with state laws, regulations, and the policies set forth by the brokerage. This supervision can include training, monitoring transactions, and providing guidance in situations that require professional judgment. The principal broker is responsible for the actions of their associates and must take an active role in overseeing real estate transactions and practices. By requiring supervision of certain activities, the principal broker ensures accountability and maintains the integrity of the brokerage. This is particularly important in the real estate industry, where the ramifications of non-compliance can lead to legal issues, financial loss, and damage to the brokerage's reputation. In contrast, options suggesting that moral support alone is sufficient, that the principal broker can ignore associates' actions, or that they can completely delegate responsibilities would neglect the essential supervisory duties necessary for maintaining professional standards within a brokerage.