Can You Use Unlicensed Individuals to Help With Your Texas Real Estate Transactions? It Depends.

Real estate transactions are complex, so many brokers and sales agents engage the help of assistants to handle the administrative details. Regardless of an assistant's professional title-unlicensed assistant, administrative assistant, office manager, and transaction coordinator are popular-the real estate license status determines what type of activities they can legally perform in Texas.

Why Does Having a Texas Real Estate License Matter?

The Real Estate License Act (TRELA) prohibits individuals from engaging in real estate brokerage activity without an active real estate license. Someone who conducts real estate brokerage activity without a license, as well as a broker or sales agent who employs that unlicensed individual, commits a Class A misdemeanor, which is a fine up to $4,000 or confinement in jail for a term up to one year, or both.

The Texas Real Estate Commission (TREC) may also take disciplinary action against a broker or sales agent who pays or associates with an unlicensed person who engages in activities that require a real estate license.

Which Activities Require a Texas Real Estate License?

TRELA requires a license for anyone who, in exchange for (or with the expectation of receiving) a commission or other valuable consideration, performs for another any of the activities listed in Section 1101.002(1)(A) of TRELA.

Section 1101.005 of TRELA and TREC Rule 535.5 outline activities that do not require a license, while TREC Rule 535.4 further outlines what activities do require a license. Here are some frequently asked questions and their answers about unlicensed assistants do's and don'ts.

Can an unlicensed assistant make calls to determine whether a person is interested in buying or selling property?

No. An unlicensed assistant cannot make calls to determine whether a person is interested in buying, selling, or leasing property, even if it is to schedule a follow-up appointment with a license holder to discuss details. Under TREC Rule 535.4(f), only license holders may solicit listings. Often referred to as "telemarketing," in Tex. Atty. Gen. Op. H-1271 (1978), the attorney general concluded that a license was required for any such activities conducted in Texas.

Can an unlicensed assistant set appointments to show a listing?

Yes. An unlicensed assistant may arrange a showing appointment on behalf of the license holder who will show the property.

Can an unlicensed assistant unlock a door or otherwise allow access to a property?

No. Show includes causing or permitting a property to be viewed by a prospective buyer or tenant, unlocking or allowing access onto or into a property for a prospective buyer or tenant, and hosting an open house at a property. TREC Rule 535.4(c) says an individual must be licensed to show a property for sale or lease in all such scenarios.

Can an unlicensed assistant host an open house?

No. An unlicensed assistant cannot host an open house.

Can an unlicensed assistant answer questions about a listed property?

It depends. TREC Rule 535.5(f) allows unlicensed assistants to confirm information previously advertised about a specific property, such as the size or price. For example, the assistant might confirm that the particular property inquired about has three bedrooms and one bath. Confirming whether any compensation is being offered and if so, what amount, is also a term or detail an unlicensed assistant can provide. If the individual asks follow-up questions that aren't included in the advertisement, or for other properties that might fit their preferences, the assistant should refer the individual to a license holder.

What tasks can an unlicensed assistant perform?

An unlicensed assistant may perform administrative tasks, including:

• Inputting data into a computer or typing contracts, but only as specifically directed by a license holder;
• Ordering supplies, scheduling maintenance, or performing other similar tasks that help keep the office running;
• Bookkeeping (however, under TREC Rule 535.146(c)(7), only a license holder may be authorized to withdraw or transfer money from a trust account);
• Training or motivating personnel or performing other similar tasks dealing with office administration and personnel matters (however, under TREC Rule 535.4(e), an unlicensed assistant may not direct or supervise others who perform real estate brokerage activity).

Can an unlicensed assistant review a contract?

No. A license holder cannot review a contract or facilitate a transaction. However, an administrative assistant can input data into a contract if specifically directed by a license holder.

Can an unlicensed assistant help arrange financing for a buyer?

It depends. While an unlicensed assistant may be able to perform some administrative tasks at the direction of a sales agent or broker, because mortgage brokers and loan originators are licensed by the Texas Department of Savings and Mortgage Lending, any questions regarding the requirements for licensure for persons dealing with financing issues should be directed to that agency.

Can an unlicensed assistant serve as a property manager for a rental property?

It depends. TRELA Section 1101.002(1)(A)(x)A says an individual must be licensed if, in exchange for (or with the expectation of receiving) a commission or other valuable consideration, the person leases a property or "controls the acceptance or deposit of rent from a resident of a single-family residential real property unit" for another person. Note that this means that TREC does not have jurisdiction over all types of property management, like commercial.

According to TREC Rule 535.4(h), a person controls the acceptance or deposit of rent if the person has the authority to any one of the following:

• Use the rent to pay for services related to management of the property.
• Determine where to deposit the rent.
• Sign checks or withdraw money from the account.

Many property management activities, such as bookkeeping and arranging for repairs, do not generally require a license. Furthermore, TRELA Section 1101.005(7) and (8) generally exempts an on-site manager of an apartment complex, as well as an owner or the owner's employee who leases the owner's improved or unimproved real estate, from the license requirement.

How Brokers and Sales Agents Can Avoid Trouble When Using Unlicensed Assistants

Brokers should establish written guidelines and training dictating to both their agents and unlicensed personnel what is allowed and not allowed of unlicensed assistants. Always monitor unlicensed assistants closely and ensure they are not "directly" assisting others in buying, selling, or leasing property.

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