What’s a Broker to Do with a Crooked Agent?


by Roberta Murphy

So what to do with that crooked agent?

(Answer: Terminate!)

crooked agentChaos creates opportunity, and our current real estate market in San Diego has spawned opportunities for both the ethical and the fraudulent.  So what does a real estate broker do when he or she discovers that one of his or her agents has done something illegal that can, or has, harmed a client?What to do with a crooked agent?

Common sense and decency suggest that the first thing to do would be to stop the bleeding, and to try and rectify the situation. Next, the broker should terminate the agent and then start fretting about the potential Catch 22 created by such situations–and as described by the California Association of Realtors:

“You discover you have an unethical sales agent, so you dismiss the agent. Then, you ask, “If I report this agent to the DRE, am I, the supervisory broker, responsible for his unethical behavior, and legally culpable?” The DRE’s Broker Supervision Taskforce, which includes several REALTOR® members, recently adopted a new policy that states that the broker-manager will not be routinely subject to audits for corrupt sales people. “

We are awaiting the results of that decision, but  still believe as California real estate brokers we are responsible for the actions of our agents. And the logical question follows that if we report crooked agents in our employee are we not ultimately responsible for their unethical actions? And does not the current threat of action against the broker by the CAR or California Department of Real Estate inhibit the reporting and prosecution of thieving real estate agents?

It seems the California Association of Realtors is finally dealing with this issue–and we may or may  not be held responsible for the actions of corrupt agents in our organizations.

My recommendation?

1. Check background of agents before hiring them in the first place.  Call previous brokers and clients. Character really and truly counts!

2.  Google the agent’s name and see if there are any legitimate negative reviews or reports against them. Also check the California Department of Real Estate for prior actions against the potential hire.

3.  Be familiar with your agents’ transactions. Far too many brokers are managing agents in name only. We are involved in some level with all transactions under San Diego Previews Real Estate.

4.  We’ve never hired a corrupt agent, but if it were discovered that we had I think we would terminate that agent immediately and do everything in our power to correct any misdeeds.

We don’t anticipate a corrupt agent or a crooked transaction because of the quality of agents we hire. However, we await further clarification from the California Association of Realtors on how such circumstances  should be handled by any California real estate broker. In the meantime, we would encourage any victims of real estate fraud to report the agent to either/or the local District Attorney or the California Department of Real Estate.

You may also want to read:

San Diego Real Estate Agent in Hiding