Unlicensed Assistant, Expired License, and Broker Supervision
Karen is the broker-owner of Summit Realty. Alex is a salesperson licensed under Karen. Alex's 19-year-old cousin, Jordan, has no real estate license. Jordan answers phones, schedules showings, and at Alex's direction prepares comparative market analyses, holds Sunday open houses, and tells buyers 'what the seller will likely take.' Alex pays Jordan $150 per transaction out of Alex's commission. Karen knows about the arrangement and thinks it is fine because Jordan is paid by Alex, not by the brokerage. Karen also has not reviewed Alex's files in eight months. One seller complains that Jordan negotiated a price reduction. Alex's license renewal was due March 1; he submitted his fee but not his continuing education certificate, and his license is now expired. Summit's policy manual says all advertising must include the brokerage name.
1. Which of Jordan's activities are permissible for an unlicensed assistant, and which are not?
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An unlicensed assistant may perform clerical and ministerial tasks: answering phones, scheduling appointments, delivering documents, maintaining files, and placing advertising that the licensee approves. Jordan crosses the line by preparing comparative market analyses, holding open houses as if he were a licensee, and telling buyers what the seller will likely accept. A CMA is a brokerage service, and discussing price, terms, or negotiating strategy is real estate brokerage activity that requires a license. Open houses are not merely clerical when the person is answering questions about the property and soliciting buyers. Jordan should be confined to tasks that do not involve advising the public, interpreting property values, or negotiating. Any advertising must identify Summit Realty, and Jordan should not be presented as an agent.
2. What are Karen's responsibilities as broker, and is the $150-per-transaction payment lawful?
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Karen is responsible for supervising the brokerage's licensees and unlicensed staff. A broker cannot knowingly permit an unlicensed person to perform brokerage services, and the source of the payment does not cure the problem. Paying Jordan $150 per transaction, even out of Alex's commission, compensates an unlicensed person for activity that requires a license and creates an incentive for more unlicensed brokerage. Karen should stop the arrangement immediately, review the files that Jordan touched, correct any advertising, and establish written procedures for what unlicensed assistants may do. She should also document the corrective action. The Board can discipline both the broker and the salesperson for aiding unlicensed activity, and the seller who dealt with Jordan may have a separate complaint. 'Alex paid him, not the brokerage' is not a defense.
3. What should Karen do about Alex's expired license and any transactions he handled after expiration?
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Karen must not allow Alex to perform brokerage activities while his license is expired. She should suspend his active role, confirm whether his continuing education is complete, and have him renew before he resumes. If Alex handled transactions after the expiration date, Karen should identify those files, preserve all records, and consult the Board and legal counsel about whether compensation can be paid and what disclosures are needed. A salesperson may not earn a commission for brokerage activity performed without a license. Karen should also review why the renewal was missed and set a calendar for all licensees. The advertising rule is separate but related: Summit's name must appear in advertising, and Karen should audit Alex's ads and open-house materials. The seller's complaint about Jordan should be documented and not dismissed.