What activities is an unlicensed assistant allowed to do?
VREB outlines what activities do and don’t require a license in 18 VAC § 135-20-165 (6)-(7):
Does NOT require a license:
- Perform general clerical duties, including answering the phones, responding by electronic media, and providing information shown on the listing;
- Submit listings and changes to the MLS;
- Follow up on loan commitments after contracts have been ratified;
- Have keys made for listings;
- Compute commission checks;
- Place signs on properties;
- Act as a courier service;
- Schedule appointments;
- Record and deposit earnest money, security deposits and advance rents;
- Prepare contract forms for approval of the licensee and supervising broker;
- Prepare promotional materials and advertisements for approval of the licensee and supervising broker;
- Assemble closing documents;
- Obtain required public information from governmental entities;
- Monitor license and personnel files;
- Order routine repairs as directed by licensee;
- Receive compensation for their work at a predetermined rate that is not contingent upon the occurrence of a real estate transaction; and
- Perform any other activities undertaken in the regular course of business for which a license is not required.
DOES require a license:
- Show property;
- Hold an open house;
- Answer questions on listings, title, financing, contracts, brokerage agreements, legal documents;
- Discuss, explain, interpret, or negotiate a contract, listing, lease agreement, or property management agreement with anyone outside the firm; and
- Negotiate or agree to any commission, commission split, management fee, or referral fee.
Can we sell mobile homes if we are selling the land beneath them?
If the mobile home is no longer mobile, that is, it’s no longer a motor vehicle but is affixed to the real estate and being taxed as real estate (not personal property), you can sell it with your real estate license. However, if it’s still a vehicle (not affixed and not taxed as real estate), you must have a license from the Manufactured Housing Board to sell it, whether you’re selling the land it sits on or not.
So the land doesn’t matter, although most of the time if it’s affixed and taxed as real estate you are also selling the land. But selling the land is not enough to make legal the sale of a vehicle sitting on it.
May I pay a team directly or do I have to pay the individual licensees?
Brokers may only pay licensees, whether individuals or entities. So if agents in your firm form a team, but don’t create and license a business entity, you continue to pay the team members individually. However, if they form an LLC called “The Jones Team, LLC” and get it licensed at DPOR as a business entity salesperson, you can then pay the entity, and the owners can distribute the payments according to their agreement.
May we pay a nonlicensed company for real estate leads?
Section 8 of RESPA expressly prohibits this, unless the source of the referrals is licensed. Section 8 of RESPA provides that it is illegal to pay or to receive anything of value pursuant to an agreement that settlement services will be referred. Real estate brokerage is a settlement service. (This prohibition applies only if there is an institutional mortgage loan in the deal.) RESPA contains an exemption in the case of referrals by real estate licensees to each other.
This could also be a violation of VREB regulations, which provide that referral is a licensed activity. See section 18 VAC 135-20-280(1) which states that “[o]ffering to pay or paying a transaction-based fee, fees, or other valuable consideration to any person not licensed in this or any jurisdiction for services that require a real estate license. . .” results in an improper brokerage commission. The VREB regulation, 18 VAC 135-20-165, also specifically defines agreeing to a referral fee as a licensed activity:
The supervising broker undertakes reasonable steps to ensure only licensees undertake activities requiring a license, including but are not limited to: a. Show property; b. Hold an open house; c. Answer questions on listings, title, financing, closing, contracts, brokerage agreements, and legal documents; d. Discuss, explain, interpret, or negotiate a contract, listing, lease agreement, or property management agreement with anyone outside the firm; and e. Negotiate or agree to any commission, commission split, management fee, or referral fee.
May real estate licensees write real estate purchase contracts?
Drafting contracts for others is the practice of law in Virginia, and it is therefore generally restricted to licensed attorneys. However, real estate licensees may do it if it’s incidental to a real estate transaction in which the licensee is involved, and the licensee does not receive a separate fee for it (See § 54.1-2101.1.)
An agent is licensed with a real estate firm and has pending transactions in which the agent is either the listing or selling agent. Prior to closing, the agent has to return his license to DPOR. With the agent’s license now “inactive”, can the agent be paid the commission earned on the pending transactions when they close?
Yes. License status at the time of payment is not relevant. All that matters is license status at the time of the act giving rise to the payment. As long as the agent was licensed when the agent got the deals, it doesn’t matter his status at closing. He could have retired, died, lost or given up the license.