Kovats Real Estate School Practice Test

What action must a broker take if they terminate the employment of a salesperson?

1. File a report with the state

2. Retrain the salesperson

3. Immediately return the salesperson's license to the Real Estate Commission

4. Pay the salesperson a severance fee

The correct answer is: Immediately return the salesperson's license to the Real Estate Commission

When a broker terminates the employment of a salesperson, it is necessary for them to immediately return the salesperson's license to the Real Estate Commission. This action serves several important purposes. First, licenses are issued under the brokerage's sponsorship, and when the employment relationship ends, the sponsorship is no longer valid. The Real Estate Commission needs to maintain accurate records of who is authorized to practice real estate. Returning the license ensures that there is clarity regarding which individuals are currently licensed and which are not, helping to uphold the integrity of the real estate profession. Further, the return of the license prevents any potential misuse of the license by the salesperson after their termination. If the license were to remain with the broker, the former salesperson could engage in activities that require a license without the broker's approval. In this context, the other options do not address the immediate obligations placed on the broker surrounding the termination of employment. Notably, filing a report with the state or paying a severance fee would not be standard legal requirements in this situation, and retraining the salesperson is not relevant after employment has ended. Overall, the correct answer reflects the procedural steps a broker must take to comply with regulatory standards following the termination of a salesperson's employment.