Principal brokers are liable for the acts of their licensees who violate advertising rules under which condition?

Principal brokers are responsible for the actions of their licensees when it comes to legal compliance, including advertising rules. The condition that establishes this liability is when the broker knew or should have known about the violation. This is based on the expectation that brokers are actively overseeing their licensees' activities and are responsible for ensuring adherence to laws and regulations.

If a violation occurs and it can be demonstrated that the broker was aware of the issue or that they could have reasonably discovered it through effective management practices, then they can be held liable. This underscores the importance of vigilance and oversight in the broker-licensee relationship.

In contrast, if a broker had no knowledge of the violation, they may not be held responsible, as liability often hinges on the awareness and opportunity to act on any wrongdoing. Additionally, simply being notified by a client or having a written complaint does not automatically implicate the broker unless it also involves the broker's knowledge or awareness of transgressions related to advertising rules. Thus, awareness is a key factor in establishing liability.