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Recently, the New Jersey Real Estate Commission had occasion to review actions which unlicensed persons in the employ of brokers or salespersons can and can’t do, given the licensure requirements imposed by the license law at N.J.S.A. 45:15-1 and 15-3. The Commission reexamined the list of ‘do’s and don’ts” which was published, with its approval, in the 3rd Quarter 1992 edition of the REC News. It was determined that all of the guidelines mentioned in that article were correct and should be observed.

While the following lists do not define every permitted or prohibited activity, they should offer reasonable guidelines for licensees to follow.

Answer phones and forward calls; process and submit listings and changes to an MLS system; follow-up on loan applications after contracts have been fully executed; set up file procedures, track and secure documents, etc.; have keys made for company listings at the direction of the licensee; write sds for approval of a licensee and place ads as directed; keep records of, and deposit payments of earnest money, security deposits and rent; type contract forms for approval by a licensee; monitor files and report findings to a licensee; compute commission checks; place signs on properties; order items or inspections as directed by a licensee; prepare flyers and promotional material for approval by a licensee; act as a courier for delivering documents or picking up keys etc. (licensee is responsible for delivery of contracts or closing materials); schedule appointments with the seller or seller’s agent in order for a licensee to show listed
property.

Make cold calls by telephone or in person to potential listers, purchasers, tenants or landlords; in the absence of a licensee, host open houses, booths at home shows, malls or fairs, or distribute promotional material at such locations; prepare promotional material or ads without the review and approval of a licensee; show property; answer any questions on listings, title, financing or closings from either the public or other licensees; discuss or explain a contract, listing, lease agreement or other real estate document with anyone outside the firm; work as a licensee/secretary in one firm and do real estate-related activities with that firm, while licensed with another firm; negotiate or agree to any commission, commission split, management fee or referral fee on behalf of a licensee.

In addition, the compensation of a personal assistant or secretary should not be based on the success of the licensee’s activity, i.e. a percentage of commission, but should be directly related to the duties the non-licensee is performing. If a licensee is using another licensee to act as their personal assistant/secretary, both should be aware they are employees or independent contractors of their broker and compensation must be paid by the broker.

All licensees are cautioned to research and adhere to Federal and State Income Tax and Employment requirements.

In the course of revisiting this issue, the Commission considered additional tasks performed by unlicensed persons which were not previously addressed. Theseincluded the placing of routine calls on late rent payments and being present at inspections for security reasons.

Pursuant to N.J.S.A. 45:15-3, the actions which require licensure as a real estate broker include “collecting, or offering or attempting to collect rent for the use of real estate.” On the basis of this statutory provision, the Commission concluded that only licensed individuals may make telephone calls for the purpose of collecting or attempting to collect late rent payments.

 

With regard to inspections, because it is highly likely that during the course of an inspection, questions will be raised by the prospective purchaser and/or the owner of the property which only a licensee would be qualified to answer, it was determined that an unlicensed individual should not be present during such inspections in the absence of a licensee. There would clearly be no impropriety where, for security reasons, a licensed individual requested their unlicensed assistant to accompany them to an inspection. A final issue reviewed involved to what extent, if at all, unlicensed persons present at open houses may respond to questions that may be answered with objective responses gleaned from preprinted objective information, for example, how many bedrooms or bathrooms a home has. The 1992 list of functions which unlicensed individuals may not perform contained the following item: “Answer any questions on listings, title, financing or closing from either the public or licensees.” It remains the position of the Commission that unlicensed individuals should not answer any questions on listings, even if the questions only inquire about objective information which is contained in preprinted material about the listed property. It is helpful to recall that unlicensed persons may not host open houses in the absence of a licensee. Therefore, the unlicensed individual can refer the person making the inquiry to the written material wherein the answer is contained, or to the licensee in attendance.

Adhering to these guidelines will enable licensees and unlicensed individuals to avoid potential violations.