A real estate brokerage is investigated by RECO for alleged misrepresentations made by one of its salespersons during a property transaction. Under TRESA, 2023, which of the following is an accurate statement regarding the brokerage's liability and responsibilities concerning the salesperson's conduct?

Question: A real estate brokerage is investigated by RECO for alleged misrepresentations made by one of its salespersons during a property transaction. Under TRESA, 2023, which of the following is an accurate statement regarding the brokerage's liability and responsibilities concerning the salesperson's conduct?

Answer options: ✅ The brokerage is strictly liable for all acts of its salespersons, regardless of its knowledge or efforts to prevent the misconduct, and faces potential fines and license suspension.

• The brokerage is not liable if it can demonstrate it had reasonable policies and procedures in place to supervise its salespersons and prevent such conduct.
• The brokerage is liable only if it directly instructed the salesperson to make the misrepresentations or was aware of them and failed to intervene.
• The salesperson alone is solely responsible for their misrepresentations, and the brokerage can only be implicated if it directly participated in the misrepresentation.

Correct answer: The brokerage is strictly liable for all acts of its salespersons, regardless of its knowledge or efforts to prevent the misconduct, and faces potential fines and license suspension.

Explanation: TRESA, 2023, reinforces the principle that brokerages are ultimately responsible for the conduct of their salespersons. While there are provisions for diligent supervision, the brokerage's license can still be affected, and it can be subject to penalties, highlighting a strong degree of strict or vicarious liability for its representatives' actions to protect the public interest.