Knowledge of Salesman's Misconduct to Discipline the Real Estate Broker
In Dougherty v. Commonwealth, State Real Estate Commission, 99 Pa. Commw. 397, 513 A.2d 555 (Pa. Cmwlth. 1986), the Court held the Commission need not establish that a broker have actual knowledge of a salesman's misconduct in order to discipline the broker under Section 604(a)(16) of the Real Estate Licensing and Registration Act (Act). Id. at 558. There, a broker's salesman misrepresented the terms of a contract for the sale of property.
The broker claimed that he reviewed most, but not all of the documents pertaining to the sale.
The Commission imposed a one year suspension of the broker's license for failing to adequately supervise his salesperson in violation of Section 604(a)(16) of the Act.
On appeal, the broker argued that because the Commission found that he did not have actual knowledge of the salesman's misrepresentations, the misrepresentations, pursuant to Section 702 of the Act, could not provide the basis for his suspension under Section 604(a)(16) of the Act.
Rejecting this argument, we explained that the broker had a responsibility to review all of the documents pertaining to the sale, and the broker's ignorance of the salesman's misconduct stemmed from this failure to adequately supervise the salesman.
It was the broker's lack of knowledge of the salesman's misconduct, rather than the misconduct itself, that served as the basis for the Commission's determination.