Key Takeaways
- Brokers are responsible for supervising all affiliated salespersons
- Brokers must ensure salespersons comply with license law and regulations
- All commissions and fees must be paid through the broker
- Brokers must maintain proper records and documentation
- Brokers are liable for the actions of their salespersons within the scope of employment
Last updated: January 2026
Broker Responsibilities & Supervision
North Dakota brokers have extensive responsibilities for their real estate operations and the salespersons they supervise.
Supervision Requirements
General Supervision Duties
| Duty | Description |
|---|---|
| Oversee activities | Monitor all salesperson activities |
| Ensure compliance | Verify compliance with license law |
| Review transactions | Review contracts and documents |
| Maintain standards | Enforce ethical standards |
| Training | Provide ongoing training and guidance |
Specific Supervision Areas
| Area | Broker Responsibility |
|---|---|
| Agency disclosure | Ensure proper disclosure is made |
| Property disclosure | Verify disclosure requirements met |
| Advertising | Approve and monitor all advertising |
| Trust accounts | Manage all client funds properly |
| Contract handling | Review all contracts and offers |
Commission Handling
Payment Requirements
| Rule | Details |
|---|---|
| Payment source | All commissions paid through broker |
| Direct payment prohibited | Salespersons cannot receive direct payment from clients |
| Fee sharing | Must comply with license law requirements |
| Documentation | Maintain records of all commission payments |
Commission Disputes
| Situation | Resolution |
|---|---|
| Between licensees | Broker involvement required |
| Between brokerages | May require mediation or legal action |
| With clients | Follow contract terms |
Record Keeping
Required Records
| Record Type | Retention |
|---|---|
| Transaction files | As required by NDREC |
| Trust account records | As required by NDREC |
| Agency disclosures | Per transaction |
| Contracts and agreements | Per transaction |
| Commission records | As required |
Availability
Records must be:
- Available for NDREC inspection
- Maintained at the broker's principal office
- Organized and accessible
Salesperson Affiliation
Affiliation Requirements
| Requirement | Details |
|---|---|
| License activation | Salesperson must affiliate with broker |
| Notification | NDREC must be notified |
| Documentation | Proper forms filed |
| E&O insurance | Must be in place |
Transfer of Affiliation
When a salesperson changes brokers:
| Step | Responsibility |
|---|---|
| Termination | Original broker notifies NDREC |
| New affiliation | New broker submits affiliation |
| License status | May be inactive during transfer |
| Pending transactions | Must be properly handled |
Termination
| Broker Duty | Details |
|---|---|
| Notification | Notify NDREC of termination |
| Return materials | Collect all company materials |
| Pending transactions | Transfer or complete properly |
| Commission | Pay earned commissions per agreement |
Broker Liability
Vicarious Liability
| Situation | Broker Liability |
|---|---|
| Salesperson acts within scope | Broker may be liable |
| Salesperson acts outside scope | Limited liability |
| Negligent supervision | Broker may be liable |
| Intentional misconduct | Case-by-case basis |
Risk Management
| Strategy | Implementation |
|---|---|
| Written policies | Clear procedures for all activities |
| Training programs | Regular compliance training |
| Transaction review | Review all contracts and documents |
| Insurance | Maintain adequate E&O coverage |
Advertising Requirements
Broker Advertising Rules
| Requirement | Details |
|---|---|
| Broker name | Must include broker or company name |
| Contact information | As required by NDREC |
| Accuracy | No false or misleading statements |
| Approval | Broker must approve all advertising |
Salesperson Advertising
| Rule | Requirement |
|---|---|
| Broker identification | Must identify affiliated broker |
| Prior approval | Must have broker approval |
| Personal websites | Must comply with NDREC rules |
| Social media | Subject to advertising regulations |
Office Requirements
Principal Office
| Requirement | Details |
|---|---|
| Location | Must maintain principal office in ND |
| License display | Display broker license |
| Records | Maintain required records |
| Supervision | Adequate supervision of activities |
Branch Offices
| Requirement | Details |
|---|---|
| Notification | Notify NDREC of branch locations |
| Supervision | Broker responsible for all offices |
| Records | May maintain at principal office |
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Test Your Knowledge
How must commissions be paid to salespersons in North Dakota?
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Test Your Knowledge
For what are North Dakota brokers vicariously liable?
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Test Your Knowledge
What must be included in all real estate advertising in North Dakota?
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