Unlicensed Assistant, Team Ads, and a Deposit Check
Broker B operates 'Ocean State Homes Team.' Sam, an unlicensed assistant, answers the team's main phone, tells a caller the team will 'shave 2% off the commission,' sends a new listing to the MLS, and hosts Sunday open houses where he discusses price and terms. Team ads show only 'Ocean State Homes Team,' not Broker B's licensed name. Broker B also pays $500 to an unlicensed contractor for a referral that led to a listing. A buyer gives Sam a $10,000 deposit check payable to Sam; Sam deposits it in the team's operating account.
1. Identify the specific license-law and regulatory problems in this scenario.
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The problems are: (1) Sam, an unlicensed person, negotiated and quoted commission, which is licensed activity; (2) Sam discussed price and terms at open houses, which is not merely clerical; (3) the team advertising omitted the licensed brokerage name; (4) Broker B paid a referral fee to an unlicensed person, which is prohibited; and (5) the $10,000 deposit was made payable to Sam and placed in an operating account instead of the broker's escrow account.
2. Which tasks may Sam continue to perform while unlicensed?
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Sam may perform clerical and administrative work: answering the phone, scheduling appointments, transmitting preprinted information, inputting MLS data supplied by a licensee, and distributing written materials. Sam may host an open house only if the role is strictly clerical and he does not discuss price, terms, condition, or negotiate. Because the scenario says Sam discusses price and terms, that activity must stop or be supervised by a licensee who handles all substantive discussion.
3. How should the $10,000 deposit be handled now?
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Broker B should immediately stop the handling error, document what happened, and move the $10,000 into the broker's escrow account. The check should have been payable to Broker B or to the escrow account, not to Sam. The broker should notify the parties and the bookkeeper, preserve records, and correct the operating-account entry. Escrow funds may not be used for business expenses. If the funds were already spent or commingled, the broker should restore the escrow account immediately and seek legal advice.