Who is liable when a licensee acts improperly on behalf of a client?

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When a licensee acts improperly on behalf of a client, liability extends beyond just the licensee. The reasoning behind this is rooted in the concepts of agency and vicarious liability within real estate practices.

In a typical agency relationship, both the client and the licensee have responsibilities and obligations. When a licensee engages in improper actions that cause harm or liability, the client may still be held responsible due to the nature of the principal-agent relationship. However, the broker-in-charge, as part of the firm, is also liable because they are responsible for overseeing the conduct of their licensees.

This comprehensive liability means that all involved parties—the client, the licensee, the real estate firm, and the broker-in-charge—can be held accountable for the licensee's actions. This accountability reinforces the importance of ethical behavior and adherence to laws and regulations within real estate transactions, ensuring that all parties are working within a framework that protects the interests of everyone involved.

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