OFFICE POLICY MANUAL

OFFICE POLICY MANUAL Magna Capital Group, Inc. requires every Agent: To remain licensed and in good working standing with the California Department of Real Estate. Per the DRE, Agents should provide their ORIGINAL real estate license to be kept in our office. Brokers need to provide a COPY of their license, and keep the original. To have excellent professional ethics and appearance as per DRE Code of Ethics Regulation. To conduct him/herself in all ways in full compliance with the statures and Rules of the DRE, and in a way which reflect the high standards of the Broker. To act independently as to the management of his/her own expenses, such as industry associationdues, licensing renewals, phones, copies, faxes, advertising, sales processing fees, all signs, business cards, postage, and any and all other business expenses. To have a valid CA Driver License (a copy to be provided) and an insured vehicle. To provide a Social Security Number (copy of card to be provided). To utilize his/her own automobile, and to maintain a liability and property damage insurance policy. To have a dedicated telephone line and voicemail or answering machine. To have a computer with Windows and internet knowledge, and to have an Internet access. To have approval by Magna Capital Group, Inc. before publication of any advertising. Page 1 of 10

Utilize Magna Capital Group, Inc. s most current file check list. A complete file must be submitted to broker, in correct stacking order, and in accordance with the most current file check list. All transactions will be subject to a refundable hold back fee. This fee may be used to cover the cost of transaction coordination in the event that the final files are not submitted orderly and/or complete, in accordance with the Magna Capital Grpu[, Inc. s most current file checklist. Arbitration of Disputes- Broker and Agent agree that any dispute, or legal claim, arising between them out of any transaction, which is not settled through mediation, shall be decided by neutral binding arbitration. To submit all listing agreements, rental agreements, accepted purchase contracts, and MLS listings to broker within 48 hours of execution. To have third party fees (i.e. transaction coordinator) paid through escrow DIRECTLY to the vendor, not to Magna Capital Group, Inc. Magna Capital Group, Inc. cannot accept commission checks other than those issued in accordance with these instructions. Please be advised that in the event commission checks are issued otherwise, they shall be returned to escrow for correction. Upon discovery of any evidence or fraud and/or misstatement of material fact during the course of a transaction, agent agrees that he/she may be subject to the reimbursement of any portion of commissions received that is sufficient to cover any and all losses attributed to these actions, in addition to the employment termination. If Broker s Office Policy Manual, now or as modified in the future, conflict with or differs from the terms of the Independent Contractor Agreement, the terms of the Office Policy Manual shall govern the relationship between Broker and Associate-Licensee. Changes to Office Policy Manual may be made from time to time, with or without prior notice. The policies online at any time represent the Company s current Office Policy Manual. Page 2 of 10

OVERVIEW Magna Capital Group, Inc. is licensed by the Department of Real Estate under Magna Capital Group, Inc. Magna Capital Group, Inc. is a full service real estate company, located in Los Angeles County, striving to set the standards for customer service and professionalism. The Office Policy Manual is a guide on how to conduct business on a regular basis. However, Associate-Licensees should always use their professional judgment. Broker and Associate- Licensee will execute an Independent Contractor Agreement, which will define the relationship in detail. BROKER AND ASSOCIATE-LICENSEE RELATIONSHIP Associate-Licensee is an independent contractor, NOT an employee, and is considered an independent contractor for the purposes of unemployment insurance. Associate-Licensee must sign an independent contractor agreement and fill out a W-9. Either party may terminate their relationship at any time, with or without cause, unless otherwise agreed in writing. REAL ESTATE FORMS: Associate-Licensee shall only use forms accessed through Zip Forms, Associate-Licensee should always keep their copy of Zip Forms updated with the most current forms. E&O INSURANCE/RISK MANAGEMENT FEES Each year, Magna Capital Group, Inc, shall establish and publish the amount per transaction to be paid by all salespersons, as a Risk Management fee. This fee will be used by the Company to offset the costs of Errors & Omissions insurance, settlements, judgments, legal fees, and other risk management costs. In the event the Associate-Licensee s transaction result in a lawsuit, Associate-Licensee is responsible for th $2,500 deductible. TRANSACTION COORDINATING Associate-Licensee must use a company approved transaction coordinator on all real este transaction. Page 3 of 10

DRE LICENSING AND EDUCATION You are required to maintain a valid California Real Estate Broker or Salesperson license in good standing while associated with this company. If your license expires, is suspended, or revoked, you may not engage in any activities on behalf of Company for which a real estate license is required. The broker may designate another company salesperson to handle your prospects, listings, and transactions during the time your license lapses, and allocate such reasonable compensation to that salesperson for work performed. Associate-Licensee is responsible to meet the education requirements of the DRE. If Associate-Licensee s license status shows Expired on the DRE website (www.dre.ca.gov), Associate-Licensee will have 45 days to change status to Active before Associate-Licensee will be terminated. REFERRAL FEES PAID TO OUTIED BROKERS AND/OR SALESPERSONS Referral fees shall only be paid to the broker of any state licensed agent/salesperson in accordance with a written agreement between salespersons, approved by a Magna Capital Group, Inc. broker, prior to close of escrow. All referral fees are to be paid out of the salesperson s gross share of commissions. The Social Security/EIN number and signature of thr cooperating broker is required in order to process the referral fee. TRUST ACCOUNT Magna Capital Group, Inc. does NOT maintain a trust fund account. Do not accept earnest money deposit checks, or handle any money in the form of a check, money order, cash, or otherwise, regarding good faith deposits, appraisals, home inspections, repairs, credit reports, or other service providers. Have your client deliver or send escrow deposit directly to the escrow company, within 3 business days after the acceptance of offer. Have your client pay for home inspections, termite inspections, etc. at the time of inspection. ADVERTISING AND MARKETING All advertising and marketing materials must be approved by Magna Capital Group, Inc. prior to its use. Associate-Licensee must abide by any state or federal do-not-call list regulations, as well as state and federal advertising requirements, and the NAR Code of Ethics. The use of the name REALTOR must be in compliance with the NAR guidelines governing the use of that name and Page 4 of 10

trademark. The Magna Capital Group, Inc. name and logo must be included in all advertisements. Pertaining to for sale signs, please be advised that certain municipalities, housing developments, and homeowners associations have strict guideline, rules, and ordinances regarding the size and placement of these signs. Associate-Licensee is responsible for determining that the Company s sign and its placement, will conform to these requirements before installation. Associate-Licensee is also responsible for having the sign removed immediately once the listing expires or the sale is closed. SIGNS AND LOCKBOXES Associate-Licensee is responsible for ordering and purchasing all signs and lockboxes from company approved vendors. MAINTAINING FILES Associate-Licensee should maintain a record of every event relative to dealings with their clients on a real estate transaction. Associate-Licensee must retain copies of all listings, deposit receipts, and any other documents executed or obtained by Associate-Licensee in connection with a real estate transaction, whether the transaction is consummated or not. Associate- Licensee must maintain a neat and orderly file on every transaction, and all files are the property of the company and are to remain either in your possession or the company s until the file is closed. As a general rule, all agreements must be in writing. If you don t have a written agreement with the principle, you may not receive your commission. If you discuss anything with any party in a transaction, always confirm your discussion with a written follow up to that party. Never sign anything on behalf of your client, another agent, broker, or anyone else. DISCRIMINATION Magna Capital Group, Inc. has a strict policy against discrimination. Associate-Licensee shall never discriminate based on race, color, religion, sex, national origin, family status, sexual orientation, disability, or any other reason. Associate-Licensee is expected to assist all customers equally. Page 5 of 10

SEXUAL HARASSMENT POLICY: Magna Capital Group, Inc. disapproves of, and does not tolerate sexual harassment of any kind. Associate-Licensee must avoid offensive or inappropriate behavior at work, and is responsible for assuring that the workplace is free from sexual harassment at all times. Magna Capital Group, Inc. prohibits unwelcome sexual advances, requests for sexual acts or favors, with or without accompanying promises, threats, or reciprocal favors or actions, or other verbal or physical contact of a sexual nature which creates a hostile or offensive working environment. Complaints of sexual harassment will be promptly and carefully investigated, and every Associate-Licensee is assured that they will be free from any reprisal or retaliation from filing such complaints. Associate-Licensee is also assured that the privacy of the complaint and the person accused of sexual harassment will be kept strictly confidential. Any Associate-Licensee who has a complaint of sexual harassment at work by anyone should immediately bring the complaint to the attention of the broker. Office investigations will include interview with all relevant persons, including the complainant, the accused, and other potential witnesses. The broker will review findings with the complainant at the conclusion of the investigation. If the investigation reveals that the complaint appears to be valid, immediate and appropriate corrective action, up to and including termination, will be taken to stop the harassment and prevents its reoccurrence. If the validity of the complaint cannot be determined, immediate and appropriate action will be taken to assure that all the parties are acquainted with this sexual harassment policy and to avoid sexual harassment in the future. The above policy also applies to harassment of any kind. IDENTITY THEFT Identity theft is a major concern when dealing with the personal information of others. It is imperative that you treat all files containing names, addresses, phone numbers, social security numbers, credit card information, or any other personal information with the utmost of care and confidentiality. Associate-Licensee must insure that any files that contain such information are kept in a secure location, or disposed of properly. ANTI-TRUST GUIDELINES Associate-Licensee must be familiar with, and abide by, all anti-trust guidelines set forth by state or federal law, NAR, CAR, and any other governing authority with jurisdiction. Do not engage in any verbal or written conversations with any other agents or brokers, from other companies, Page 6 of 10

regarding the following: 1) The setting of rates and percentages of shared commission compensation to cooperation brokers. 2) Boycotting or not doing business with a particular competitor. 3) The setting of commissions, charges, or other fees to the public. PERSONAL TRANSACTIONS Associate-Licensee may represent themselves in a purchase or sale of a personal property. Associate-Licensee must disclose in writing that they are a real estate licensee. Associate- Licensee must also disclose in writing if they have a special or family relationship with a buyer, or where there is a possibility that they could acquire and indirect financial or legal interest in the property. VACATIONS As an Independent Contractor, Associate-Licensee is entitled to schedule vacations at their discretion. However, if there are any pending transactions, please advise the Broker of your vacation schedule, and how any pending business will be handled in your absence. LITIGATION AND CLAIMS HANDLING You are required to 1) Promptly notify your broker of any claim, or potential claim, made against you and/or the company, including any demand received by you for money or service alleging a negligent act of omission, any notification of the commencement of a lawsuit, arbitration or mediation process, or any written or verbal notice or threat that anyone intends to hold you and/or the company responsible for any alleged wrongdoing. 2) Cooperate with the company in defense of the claim. 3) Promptly pay to the company any amounts due hereunder upon notice to you from the company. 4) The company has the right to make all decisions concerning the defense of the claim, including choice of counsel. In the event you object to any decision made by the company, you may obtain your own attorney at your own expense, however, you shall not be relieved from the obligation to pay your portion of the cost of the claim as set forth herein. 5) Except as provided below, the cost of the defense of the claim, or to defend or protect against any possible or potential claim where the company or you is not involved as a part, including attorney s fees, and the cost of any settlement or judgment (collectively the cost of the defense ), shall be allocated between Associate-Licensee and the company in the same percentages as per your Independent Contractor Agreement or respective transaction that led to Page 7 of 10

the claim, whether or not the transaction is actually closed. 6) You shall be responsible for all costs of a claim if you fail to follow any law, regulation, or company policy as set forth in this policy manual, and the failure results in a judgment or other final adjudication based on that failure. 7) You shall be solely responsible, and shall reimburse the company, for all the company s costs of defense if a judgment or other final adjudication on any claim adverse to you and/or the company establishes that dishonest, fraudulent, criminal, or malicious acts, errors or omissions were committed or results in a finding of intentional tort, slander, defamation, or any conduct which leads to the imposition of punitive, exemplary or multiple damages, fines or penalties, or establishes discrimination on the basis of race, creed, religion, ethnic background, national origin, age, sex, handicap, familial status, physical disability, sexual preference, or any other unlawful classification. LISTINGS Listings are the property of the company, even upon your termination. Within 24 hours after notice of termination by either party, you must provide your broker with a list of all active listings taken by you, and all pending transactions which, if completed, you will be entitled to compensation from the company in accordance with the terms or your independent contractor agreement, commission schedule, or other written agreement. You specifically agree that you may not contact the sellers of properties, where listings were taken by you, for the purpose of directly or indirectly soliciting, or inducing, the client to terminate their listing with the company. If Associate-Licensee has open listings that they wish to bring with them upon joining Magna Capital Group, Inc., Associate-Licensee must obtain written permission from their previous broker before releasing the listings. TERMINATION Your association with Magna Capital Group, Inc. can be terminated by either party, with or without cause, at any time upon written notice given to the other party. If this agreement is terminated while you have listings, or pending transactions that require further work normally rendered by you, the broker will make arrangements with another salesperson in the company to perform the required work. The licensee performing the work shall be reasonably compensated for performing the work, and such reasonable compensation shall be deducted from your share of the commission. Page 8 of 10

DISPUTES DURING ESCROW If a dispute arises during escrow between buyer and seller, buyer, the cooperating broker and/or company, which cannot be resolved by negotiation between the parties and the agent(s) involved, and the company determines that it is in the best interest of the company to resolve the matter during escrow than risk a potential claim or litigation after close of escrow, than company broker has the right to negotiate a resolution of the dispute which may involve a reduction in the commission to be received, or credit given to one of the parties. In that event, and regardless of actual company or agent liability or responsibility in the dispute, the agent(s) and the company will participate in the commission reduction or credit pro rata. Page 9 of 10

Acknowledgement of Receipt of Office Policy Manual (For Associates to sign and return) I, the undersigned, do hereby acknowledge that I have read, understand, and agree to abide by the policies stated herein and all subsequent amendments. I understand that, from time to time, the Company may, in its sole and absolute discretion, change any policies, benefits, or practices in the Manual, with or without prior notice. Initial Furthermore, I understand that I am an Independent Contractor, and that my association with Magna Capital Group, Inc. is not for a specified term. Accordingly, either I or the Company can terminate our association at will, with or without cause, at any time. Initial Furthermore, I acknowledge and understand that Magna Capital Group, Inc. maintains a strict policy against harassment/discrimination. I agree to comply with all aspects of the policy against sexual harassment, and other forms of harassment or discrimination. I understand that if I violate any aspect of the company s policy against harassment, I may be subject to disciplinary action, up to and including termination. Initial My signature below certifies that I have received the Office Policy Manual, and agree to abide by its provisions during my association with Magna Capital Group, Inc. It supersedes all prior agreements, understandings, and representations concerning my association with the Company. Associate-Licensee Name Signature: Date: Page 10 of 10