Most brokers who run their own brokerage employ assistants to help them with day-to-day office activities.
These assistants are unlicensed and include:
- listing coordinators;
- transaction coordinators;
- office managers;
- bookkeepers; and
- [See RPI Form 507]
These unlicensed assistants free up the broker’s time to complete activities for which a license is strictly required. But where is the line between tasks the unlicensed assistant may complete on the broker’s behalf and those activities requiring a license?
This is an important line to consider, since an unlicensed assistant who engages in brokerage activities without a license is subject to:
- a penalty of up to $20,000; and/or
- a six-month jail term. [Calif. Business & Professions Code §§10137, 10139]
Further, the broker who permits a finder or unlicensed assistant to perform any type of “licensed” work beyond solicitation for a referral to the broker or agent may have their license suspended or revoked. [Bus & P C §§10131, 10137]
Here are some common activities an unlicensed assistant may conduct for the broker:
- handling documents;
- performing tenant-related negotiations;
- canvassing for prospective clients to enter into a listing agreement with a licensed broker or agent;
- opening a property to third-party service providers; and
- communicating with parties to a transaction.
But an unlicensed assistant may not:
- enter into listing agreements;
- take part in any negotiations which lead to the creation of a real estate transaction [Bus & P C §10131(a)];
- discuss a property’s price or terms;
- discuss the property conditions; or
- discuss the conditions of a transaction. [Spielberg v. Granz (1960) 185 CA2d 283]
But what about the day-to-day tasks unlicensed assistants carry out for their brokers?
The California Department of Real Estate (DRE) recently released guidance on common activities performed by unlicensed assistants when the line between allowable and non-allowable actions might be blurry.
The DRE clarifies the following actions may be performed by an unlicensed assistant — as long as they have the permission and supervision of their employing broker:
- cold contacting potential clients;
- assisting licensees at open houses by:
- placing signs;
- greeting potential buyers;
- distributing handouts prepared or reviewed by the licensee; and
- arranging appointments for the licensee;
- assembling comparative market analyses (CMAs);
- communicating with the public for most purposes other than to discuss a specific property, transaction or product;
- scheduling appointments for licensees with their permission, including with:
- clients; and
- third-party service providers;
- being present to let in third-party providers, such as inspectors or contractors;
- preparing advertising for a transaction when it is reviewed by the licensee;
- preparing documents under supervision of the licensee;
- delivering documents for signature, as long as they do not discuss the document with the recipient;
- handling and providing a receipt for trust funds; and
- reviewing documents and making recommendations for changes to the licensee.
When brokers share their responsibilities, they are able to oversee more agents and handle more transactions. But brokers always need to exercise proper supervision to ensure their unlicensed assistants don’t cross over into activities needing a license.