It’s a new year and our records show a lot of sales agents change brokers during this time. TREC wants you to know the rules that apply in this situation.
Rule §535.121(b) and (c) states that if a sales agent intends to terminate sponsorship they must notify their sponsoring broker immediately in writing. If a broker intends to terminate sponsorship they must notify their sponsored sales agent immediately in writing. Before this step occurs, a sales agent may want to review their sponsoring broker's termination/change of sponsorship procedures and to be aware that terminating the relationship could impact their representation in ongoing transactions.
Brokers may need to consider the requirements of their Errors and Omissions (E&O) insurance coverage or other security concerns regarding access to internal computer systems.
By rule, a broker or a sales agent must also immediately terminate the sponsorship through one of two ways: either online or by submitting the appropriate form. To ensure the quickest transition, license holders can use the free "Manage My Sponsorship" tool within TREC's online services after notifying the sponsored sales agent or sponsoring broker in writing of the termination. Keep in mind that when a sales agent terminates sponsorship and associates with a new broker online, the former broker is not automatically notified by TREC of the termination. The sales agent must communicate the termination with their sponsoring broker directly in writing as stated in TREC’s rules.
While it can be difficult to part ways, effective planning and open communication can avoid a violation of TREC rules or other issues during a transition.