The PAR Legal Hotline gets a lot of questions about agents wanting to hire “assistants” to grow their real estate practice.
But these questions aren’t quite as cut and dry as you might hope since there is not a legal or statutory definition of exactly what an “assistant” is or does. Let’s dive into some of the general questions, and then end with a very specific one we’re hearing a lot these days.
What’s the difference between a “licensed assistant” and an “unlicensed assistant”?
The easiest way to understand this question is to ignore the word “assistant” and think of these roles simply as “licensees” or “non-licensees.”
A “licensed assistant” is nothing more than real estate licensee who happens to be helping out another licensee – presumably by doing certain tasks that require a real estate license. An “unlicensed assistant” is a non-licensee who, if you’re doing it right, will be doing some combination of tasks that does not include any licensed activity.
So… a licensed assistant is a licensee and needs to be treated as one. An unlicensed assistant is a non-licensee and needs to be treated as one.
You’ll be referring back to this one…
Can my assistant do <fill in task here>?
See above: licensees vs. non-licensees.
Only a licensee can do tasks that are considered to be licensed activity; anyone (licensed or not) can do tasks that are not considered to be licensed activity.
Giving someone the title of “assistant” doesn’t change that. For example, there’s no loophole allowing an unlicensed person to do licensed activity because they’re “supervised by a licensee” or something like that.
That said, it legitimately can be difficult to figure out which tasks fall into which category since there is no law/regulation/guidance that lays this out. Your best bet is to think about how those tasks fit into a transaction. Tasks that deal directly with consumers – particularly anything that involves their needs/wants/opinions/decisions – are likely to be licensed activity. Tasks that focus more on internal operations or processing a transaction after the decisions are made are more likely to be unlicensed activity.
THIS LIST IS NOT GUARANTEED (since we do not have clear Pennsylvania State Real Estate Commission guidance in all cases), but here’s a good place to start:
- Licensed Activity (only by licensees)
- Discussing properties with consumers (features, neighborhood, pricing, etc.).
- Hosting an open house.
- Property showings.
- Telemarketing activities.
- Negotiating contract terms/filling out contracts.
- Unlicensed Activity (by anyone)
- Processing consumer inquires and routing them to licensees.
- Placement/removal of signs and lockboxes.
- Creating/designing/writing marketing materials.
- Managing transactional paperwork (transaction manager).
- Other general clerical duties (MLS data entry, file maintenance, setting appointments).
When in doubt, ask your broker for input – but it’s usually better to err on the side of caution, since agents (and their brokers) who allow licensed activity by non-licensees have been sanctioned by the commission.
So… who actually hires and pays an assistant?
See above: licensees vs. non-licensees. (Sounds weirdly familiar, right?)
A licensee, by definition, can only collect payment for licensed activities from the broker they are affiliated with. Period. Any licensee who is doing licensed activity – whether as a “full” agent or as a licensed assistant – must be directly employed and paid by the broker.
The most common version is that a broker will hire the licensee at the recommendation/request of the agent who wants to work with them and then the broker will pay them according to whatever deal is transmitted to the broker. To take a simple example, if the assistant is owed $1,000, the agent will give that money to the broker (perhaps it’s withheld from a commission owed to the agent) and then the broker will write the check to the assistant. But the money cannot go directly from agent to licensed assistant.
** Bonus answer: If your broker practices designated agency, then any licensed assistant doing licensed work for a client should also be designated on all the paperwork.
An unlicensed assistant, however, is not bound by that rule since they’re not doing licensed activity, so an agent could elect to hire an unlicensed assistant directly if the brokerage policy permits it. Payments could then go directly from the hiring agent to the assistant.
** Special Note: There’s this thing called a qualified association that could come into play as well. We won’t discuss here, but there are a couple questions about QA employment in the detailed FAQ you can (and should) download from that article. **
How are assistants paid? Do they have to make minimum wage? Who pays taxes? Can they be independent contractors?
Whoa there, Nelly! This gets really complicated, but the determination of whether someone is or isn’t an “employee” will depend to the details of the work that’s being done and how it’s supervised, not the title or the status of who is hiring them.
The best and only advice we can give to talk with an accountant and/or attorney so you can set that relationship up correctly from the start.
And let’s close with a common question that ties all of these concepts together!
Q: With this crazy market, I can’t get all my buyers into all the houses they want to see each weekend. How can I pay someone to do showings for me?
Here’s your answer, with citations back to the general questions above.
The commission considers showings to be licensed activity, so if you tried this it would have to be by hiring another licensee. (Q2)
A licensee has to be hired and paid by the broker, not by you directly, so it only works if broker policy permits and with the broker’s participation. (Q3)
And trying to hire licensees from different brokerages for this would be a bad idea, considering that it really messes with agency relationships if random agents from other random brokerages are potentially privy to your client’s confidential wants and needs. (Another bonus answer.)
And finally, the amount and manner of payment will depend on the employment relationship you/the broker creates with the licensee, and you’d want to have an accountant and/or attorney create the paperwork for this relationship to ensure you’re on firm legal ground. (Q4)