If a broker suspects fraudulent activity, what is their responsibility?

A broker who suspects fraudulent activity has a critical responsibility to report the issue to the appropriate regulatory authority, which in this case is the board. This obligation is rooted in the broker's duty to maintain integrity within the real estate profession and protect the interests of clients and the public.

By reporting the suspected fraud, the broker helps ensure that the matter is investigated properly and that any illegal or unethical behavior is addressed in accordance with the law. This promotes a transparent and fair real estate market, which is vital for maintaining trust in the industry.

Handling the matter internally or advising the agent may not sufficiently address or resolve the potential legal implications of fraud. Ignoring the issue completely is unethical and goes against the fiduciary responsibility that brokers have to their clients and the community. Therefore, making a report to the board is the proper course of action for a broker who suspects fraudulent activity.