Due-diligence checklist
10 Questions to Ask Your Broker-of-Record Provider
When a broker-of-record arrangement fails, the regulator's letter goes to your company — not your vendor. Use these questions to test any provider, including us.
Plenty of firms will put a broker's name on your license for a few hundred dollars a month. Most of those arrangements look fine until the first complaint, audit or renewal. The questions below separate a real compliance function from a name on paper. For each one: what a good answer sounds like, and the red flag.
Who is the named licensed broker on our firm license in each state — and can we verify it on the regulator's lookup today?
Good answer: A named person per state, with a license number you can look up yourself.
Red flag: "Our network covers that state" with no name, or a name you can't find on the state lookup.
Is that broker actually allowed to sit on our license?
Good answer: They know which states limit a broker to one firm (Arizona, Colorado and Minnesota, among others) and explain how they staff those states.
Red flag: The same broker is "covering" several companies in a state that only allows one.
Does the broker hold the title the state requires?
Good answer: They know your state's officer/manager requirements (e.g., Texas, New York and Florida require the designated broker to hold a defined role in the licensed entity) and how to structure it so the broker's role stays limited to statutory duties.
Red flag: No discussion of entity structure, or a broker title that exists only on a form.
Who carries errors & omissions coverage, and does it cover the broker supervising us?
Good answer: A clear answer on who carries E&O, the limits, and who is a named insured.
Red flag: "You don't need it" or "we'll sort that out later."
Who reconciles our trust accounts every month — and where is the documentation?
Good answer: A named reviewer, a monthly reconciliation cadence, and a written record you can hand a regulator.
Red flag: Trust accounting is "your bookkeeper's job" with no broker review.
Do we get a written policy and procedure manual that is audit-ready?
Good answer: Yes, maintained per state and updated as rules change.
Red flag: A generic template, or nothing until you ask.
Who reviews our advertising, leases and management agreements — and how fast, in writing?
Good answer: Committed turnaround times in the agreement for escalations, document review and advertising review.
Red flag: "Just send it over whenever" with no service levels.
What happens the day a regulatory complaint arrives?
Good answer: A named escalation path, a response process, and a track record of handling complaints.
Red flag: They have never handled one, or the plan is to forward it to you.
Who tracks renewals, entity filings and continuing education in every state?
Good answer: Per-state license tracking with renewal dates monitored on your behalf.
Red flag: You find out a license lapsed from a tenant, a lender or the state.
What happens if your broker leaves?
Good answer: A bench deep enough that one person leaving does not take your license with them.
Red flag: Everything rides on one individual.
The risk sits with the operator
In many states, an unlicensed or improperly supervised firm can face fines, be unable to enforce its fees or commissions, and see its license activity unwound — and those consequences land on the operating company. Institutional buyers, lenders and acquirers look for this in diligence. A cheap arrangement that fails diligence is the most expensive one you can have.
How 50 State Brokerage answers these questions
We built 50 State Brokerage around this list. Named licensed brokers on every firm license, trust reconciliation documented monthly, audit-ready policy manuals, written service levels, per-state renewal tracking, and a broker bench deep enough that no client depends on one person. We are the exclusive broker for Darwin Homes (Pagaya), and our client list has been through public-company diligence.
Want a second opinion on your current setup?
Send us your current broker-of-record structure and we'll review it against this checklist and reply in writing — no charge, no obligation.
This checklist is general information, not legal advice. State requirements change; confirm specifics with the relevant regulator or your counsel.