Part 2: Licensed to what?

Part 2 of a 2-part series

Many real estate offices employ office workers who keep the books, provide clerical services and greet clients at the reception desk. What kinds of work are these unlicensed, “exempt” employees permitted to perform? After all, having a bright-line definition of licensed activity would be helpful since crossing the line is a violation of law that can result in prosecution for the non-licensee and broker alike.

Unfortunately, the law does not provide such a definition. RELRA definitions of “broker” and “salesperson” offer some guidance: clearly negotiating the listing, lease, sale or exchange of real estate constitutes licensed activity, as does managing and holding oneself out as a broker or salesperson. A “broker” and “salesperson” are also defined as those who undertake to promote the sale, exchange, purchase or rental of real estate.

So what does it mean to “promote” sales and how does the unlicensed assistant avoid promoting the sales activity of his or her employer? When an unlicensed assistant exercises discretion in answering real estate-related questions on topics like availability, financing, pricing, features/amenities and corrective proposals, then he or she is likely engaging in licensed activity.

Serving as a conduit between the licensee and consumer is likely acceptable — if the unlicensed person merely passes along the representations and statements of the licensee. When the salesperson directs her unlicensed assistant to call a seller only to confirm receipt of a buyer’s mortgage commitment, for example, the scenario is likely within regulations. But if the seller were to ask questions about the commitment or related matters, the unlicensed assistant would have to defer the question to the salesperson to remain within the law.

Brokers who have supervisory responsibility risk violating RELRA when unlicensed assistants cross the line and engage in acts of discretion for which a license is required. Assuring that the conduct of unlicensed employees is restricted to clerical tasks and non-discretionary acts directed by licensees is the only safe approach. Drafting advertisements and documents is only acceptable if the work is prepared in draft form for complete and comprehensive review by a licensee. Brokers are advised to have assistants perform their tasks in the background with minimal client contact: opening doors, placing signs, providing telephone reminders of inspection dates and the like are acceptable.

The safest practice is to have assistants earn their salesperson’s license!  Then the occasional line crossing is of no consequence.