A brokerage is authorized to trade in real estate on behalf of another person. In turn, the brokerage as an owner employs or appoints salespeople to perform day-to-day listing/selling functions in the real estate trading process. Such activities are always performed under the guidance and direction of the broker of record.
Broker of Record
A broker of record is responsible for ensuring that the brokerage complies with the Real Estate and Business Brokers Act, 2002 (REBBA 2002), and its regulations. Responsibilities also include maintaining the brokerage trust account and reviewing and signing trade record sheets.
Many salespeople pursue broker registration without becoming a broker/owner. These individuals remain with their particular employing brokerages and are legally recognized as brokers, but not necessarily brokers of record.
Types of Brokerages
The three ownership options when forming a brokerage are: sole proprietorship, partnership, or corporation. The choice of brokerage to set up depends on individual circumstances, such as tax considerations and personal goals.
Brokerages may also have branch offices, which are regulated under provisions of REBBA 2002.