Open House, Referral Fee, and a Lapsed License
Dana is a licensed Montana salesperson at Summit Realty. In March, Dana's unlicensed assistant, Kai, hosts a Sunday open house at Dana's listing alone, tells two visitors the seller "would probably take $18,000 under list," and posts a Facebook ad reading "Dana Homes Group - call Kai for a free market analysis of your home." Separately, Dana refers a buyer to a title company and accepts a $300 check made payable to Dana personally. In April, Dana's license lapses for nonpayment of renewal fees while Dana keeps writing offers and collecting commission checks through Summit. Summit's broker says the office never reviews advertising, license status, or team names. Dana shrugs: "Kai isn't licensed, so the rules don't apply to him, and the $300 was a gift from a friend."
1. Sort the facts: which acts required a Montana license, and what could Kai lawfully have done unlicensed?
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Licensed activity (not allowed for Kai):
- Conducting an open house alone and discussing price and terms with prospects. Talking about what the seller "would take" is negotiation-adjacent at minimum, and it also leaks the seller's negotiating position.
- Advertising a "free market analysis" under a team name. Soliciting brokerage business and pricing property for the public is the core of brokerage.
Lawful unlicensed help: answering phones, scheduling, delivering documents, placing pre-approved advertising that names the brokerage, and clerical file work - all under the broker's supervision.
Advertising defect: an ad for brokerage services must identify the brokerage, not just a team name, and the broker must approve it. "Dana Homes Group" standing alone is a supervision failure by Summit as much as a problem for Kai.
Reasoning rule: the question is never the person's job title; it is whether the activity calls for a license - soliciting, negotiating, pricing, or advising on a transaction.
2. Analyze the $300 check and the lapsed license. What are the consequences and who is responsible?
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The $300: a licensee may not accept compensation for brokerage services from anyone other than their own broker/employer, and a title company paying for a referral is also a classic prohibited kickback for a settlement-service referral. Calling it a "gift" fails because it was tied to the referral. Correct handling: return the check, disclose the solicitation to the principal broker, expect possible discipline.
Lapsed license: practicing while unlicensed is not a paperwork problem - it is unlicensed brokerage. Dana must stop all licensed activity immediately, renew (late renewal with penalty if available), and expect the commissions earned during the lapse to be questioned. The clients must be told.
Who is responsible: Dana primarily, but the broker is responsible for supervision and for verifying that affiliated licensees hold active licenses and that advertising is reviewed. "The office never checks" is itself a violation, not a defense.
3. If you were Summit's principal broker, what would you fix this week, and why does each fix matter?
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- License roster audit - confirm every affiliate's status and renewal date; calendar renewals. An inactive licensee on the roster creates unlicensed-practice exposure for the whole office.
- Written advertising policy - brokerage name required on all ads including social media and team pages; broker pre-approval of team names and price-analysis offers.
- Unlicensed-assistant job description in writing - a short do/don't list so Kai is not hosting open houses or quoting the seller's bottom line.
- Gift and referral policy - no compensation from title companies, lenders, inspectors, or contractors; written acknowledgment signed by affiliates.
Each item maps to a supervision duty the broker cannot delegate away. Regulators typically prove a supervision case with exactly this kind of evidence: no policy, no review, no calendar.