WEEKLY PRACTICE TIP
BROKER RISK MANAGEMENT
Proper Use of Transaction Coordinators
Q: I am having trouble with the Transaction Coordinator in our office. She can’t seem to do things right and is making me look bad. I asked her to fill out and serve a Notice to Buyer to Perform and she checked the wrong box; we had to do it over and lost time. My seller is upset at ME. I also left her a voicemail to draft a contract Addendum and to send it to the buyer agent. She messed that up also. On another file where I represent the buyer, she missed a critical deadline to get a contingency removal to the listing agent after a NBP, and they issued a contract cancellation. I want my broker to fire her, but am getting nowhere.
A: There is a major problem here – but the problem is not with the Transaction Coordinator.
Transaction Coordinators have become a fixture of the real estate business. They are essential to the smooth running of a real estate office. They take the routine tasks off the plate of the agents, making them more efficient. They remind agents of critical dates. When agents are running around 100 mph with their hair on fire at the beck and call of their clients, the TC’s are in the background calmly keeping order, making sure agents are aware of deadlines, checking documents for signatures and dates, etc. As transactions have become more complex, it is hard to imagine an agent not having this assistance.
TWO TYPES OF TRANSACTION COORDINATORS: There are basically two types of TC’s:
1. Those who may NOT engage in licensed activity. That is, unlicensed TC’s and any TC working independently or for a TC firm whether licensed or not. These TC’s are in many ways similar to an unlicensed assistant. There is a fairly clear line between licensed and unlicensed activity. A number of years ago, CAR and CalBRE collaborated to make clear to agents how far an unlicensed assistant or TC can go without crossing the line into licensed activity. Those guidelines are contained in the CAR Legal Memo entitled “Unlicensed Assistants” which can be read and downloaded at:
http://new.car.org/riskmanagement/qa/licensing-folder/unlicensed-assistants/
2. Those who may engage in in licensed activities: This is a TC who has a CalBRE license and is licensed to your brokerage. If a TC has a CalBRE license but is not licensed to your brokerage, then that TC may NOT engage in licensed activity on your file.
BUT TC’s ARE NOT “THE AGENT” – AND SHOULD NOT BE ASKED TO DO THE AGENTS’ JOBS FOR THEM.
There seems to be an increasing tendency for agents to just dump a lot of their work on TC’s. Maybe because agents are busy. Or maybe some agents misunderstand the proper role of the TC. Or maybe it is just easier to do so.
But…
YOU, the agents, are responsible for the transaction, the integrity of the transaction, the accuracy and timeliness of the documents. If your names are on the purchase agreements, it is YOU who are responsible; and it is you who are liable if there is an error or omission resulting in liability.
PRACTICE TIPS:
1. You, the agents, are ultimately responsible for the file, the documents, and the accuracy of communications, written and verbal.
2. If something that is the responsibility of the listing or selling broker is done negligently, it is not the TC who will ultimately be legally liable. And it is not the TC whose license may be sanctioned by CalBRE for negligence. Those honors belong to the agent on the file. There is no excuse for, “Well, the TC messed up and made the mistake.”
3. Do not ask TC’s to draft or complete documents or forms without specific instructions.
4. Never transmit, nor allow a TC to transmit, a document or form which was prepared by a TC pursuant to your instructions unless you have first READ AND APPROVED each document and form. You, and you alone, are responsible for content, accuracy and completeness of each document and form.
5. ESCROW OFFICERS: In Southern California, where detailed escrow instructions are prepared and signed up front, all of the above applies here as well. It is unfair to ask escrow officers to draft amended escrow instructions for the parties to sign based simply on an instruction from the agent. The proper procedure is for the agents to draft CONTRACT addenda, have the parties sign them, and then send them to the escrow officer to draft corresponding escrow instructions. Again, blaming the escrow officer for erroneous escrow instructions is not the answer.
6. TREAT YOUR TC WITH RESPECT. You are in a power position vis-a-vis the TC. We are all rightfully judged by how we treat those who are not in a position to fight back.
7. THANK YOUR TC. They are often the unsung heroes in the background getting little credit when you are celebrating a successful closing.
ATTORNEY-CLIENT PRIVILEGED COMMUNICATION. Do not forward to sellers, buyers or third parties. This Weekly Practice Tip is for the exclusive use of clients of Broker Risk Management and their agents. It may not be reproduced or distributed without the express written consent of Broker Risk Management. The advice and recommendations contained herein are not necessarily indicative of standards of care in the industry, but rather are intended to suggest good risk management practices.