Brokerage HR Policy Compliance Checklist

Pull current license status for every affiliated agent from the state commission portal (CA DRE, FL DBPR, TX TREC, etc.). Flag anyone expired, inactive, or on a referral-only license. An agent practicing on a lapsed license is a license-law violation for the designated REALTOR — not just the agent.

Most state commissions require a fresh criminal background check at hire and again at certain renewals. Out-of-state surrendered licenses and undisclosed felony pleas are the most common findings the original commission application missed.

Some findings (DUI, certain misdemeanors) are routine; others (fraud, theft, prior license surrender) require self-reporting to the commission and a discretionary affiliation decision. Document the rationale either way — the file is the only thing that protects the brokerage in a later audit.

Most agents are statutory non-employees under IRC §3508 and paid as 1099 contractors, but admin staff, ISAs, and salaried team members are W-2. State misclassification rules (CA AB 5, MA ABC test) tighten the federal carve-out — verify each role against current state guidance, not last year's.

The ICA should cover commission split, cap, post-cap, transaction fees, lead-source assignment, and a clean termination clause specifying lead and client ownership. The single most common dispute on agent departure is whose CRM the leads belong to — name it in the ICA, not after.

Confirm the agent is named on the Errors and Omissions policy before they go active in the MLS or write a single offer. Some brokerages bill the per-agent E&O premium back as a transaction fee — the bookkeeper needs the effective date to start that billing correctly.

MLS access typically requires proof of local board membership and a signed MLS subscriber agreement. Order the Supra eKEY or lockbox key, register the agent in ShowingTime/BrokerBay, and add them to the brokerage Dotloop or SkySlope account before the first transaction.

NAR requires REALTORS to complete the Code of Ethics course every three years; many states layer their own fair housing CE on top. Capture the certificate in the agent file — the local board will ask for it during a Code of Ethics complaint, not before.

The mentor reviews the agent's first three contracts before submission and sits in on at least one closing. Document the mentor split in writing — verbal mentor splits are the second-most-common commission dispute after lead ownership.

Walk the agent through GCI year-to-date, units closed, units under contract, and pipeline conversion by lead source. A common gotcha: agents track Zillow and Realtor.com leads in personal CRMs that the brokerage can't audit — require the brokerage CRM (Follow Up Boss, BoldTrail, BoomTown) for any company-paid lead.

Spot-check recent files for the issues that draw commission citations: agency disclosure signed at first substantive contact, lead-based paint disclosure on pre-1978 properties, EMD deposited within the state-required window (typically 3 business days), dual agency consent in writing, and the buyer rep agreement now required post-NAR-settlement.

Most states require 12-30 CE hours per renewal cycle, with mandatory ethics and fair housing components. Pull the commission's CE transcript — agents routinely think they completed required hours and find at renewal that the course wasn't approved for that state.

Document the missing CE hours, the state renewal deadline, and a written remediation plan with weekly check-ins. An agent who renews late has license status briefly inactive — every transaction during that gap is uninsured under the brokerage E&O policy.

Reconcile each agent's year-to-date GCI against the cap and post-cap split in their ICA. Brokermint or Lone Wolf back office should match the spreadsheet — discrepancies usually trace to mentor splits, transaction fees, or referral deductions applied in one system but not the other.

RESPA Section 8 prohibits anything of value in exchange for referrals of settlement services. Confirm any payments to or from preferred lenders, title companies, or inspectors fit within an MSA, an Affiliated Business Arrangement disclosure, or the agent-to-agent referral exception. Casual gift cards from the lender to the agent are the most common Section 8 violation.

1099-NEC must be issued to every contractor agent paid $600 or more, with copies to the IRS by January 31. Reconcile against the brokerage trust-account disbursements, not just the operating account — referral fees and mentor splits paid through trust are the ones most often missed.

Capture the source so the response path is correct from the start: a Code of Ethics complaint goes to the local board's Grievance Committee, a license-law complaint goes to the state commission, and an EEOC or fair housing complaint triggers very different timelines and counsel involvement.

State commission complaints typically carry a 20-30 day response deadline and require the broker-in-charge to answer in writing under oath. Loop in E&O carrier counsel before drafting the response — anything you put in the answer is discoverable in any subsequent civil suit.

Limit knowledge to the designated REALTOR, the named agent, and counsel. Do not discuss the matter at sales meetings or in team chats. Retaliation against a complaining agent — even perceived retaliation through lead reassignment — converts the original complaint into a much larger problem.

Cover steering, source-of-income protections in your jurisdiction, advertising language pitfalls ("perfect for a young family," "safe neighborhood"), and the script for the unsolicited "good area / bad area" question every agent gets. Keep the signed roster — fair housing testers do reach out to brokerages, and the training record is the brokerage's first line of defense.

Confirm agents follow the brokerage's first-meeting protocol: meet new prospects at the office or a public location, photo ID before the first showing, share location through Forewarn or the NAR REALTOR Safety app, and a check-in cadence with the office. The Beverly Carter case is still the reference point for why this is non-negotiable.

Business email compromise targeting closing wires is consistently in the FBI IC3 top complaints. Every agent should be able to recite the rule: wire instructions are verified verbally, to a phone number from an independent source, never to a number in the email containing the wiring PDF. Brokerages have lost six-figure transactions to a single click on a spoofed escrow email.

Walk the office for blocked exits, expired fire extinguishers, and missing first-aid supplies. Run a tabletop drill for an active-threat or severe-weather scenario — agents are in the office sporadically, so the drill exists mostly for admin staff and any open-house traffic in the lobby.