J, a designated broker who manages several commercial properties, also owns a janitorial company. Under what conditions is this permitted?

• A. J may use her own company without disclosure.
• B. J discloses her interest and obtains owners' written permission to use it.
• C. J must refrain from using her own company.
• D. J must obtain approval from the broker's association.

Answer: (B)

This item tests handling conflicts of interest when a broker has ownership in a service provider they'd use for clients. When a designated broker owns a janitorial company and manages properties for clients, transparency is required. The broker must reveal that ownership and obtain the owners’ written consent before using that company. This protects clients by ensuring they can make an informed choice and prevents the broker from steering business to a personal interest.

Disclosing the interest and getting written permission is the proper process. Using the broker’s own company without disclosure would create a conflict of interest and undermine trust. Simply refraining from using the company isn’t necessary if proper consent is obtained, and asking the broker’s association for approval isn’t the correct mechanism in this scenario. Therefore, disclosure plus written owner consent is the correct condition.