Licensing Regulation: Licensed Activities and Exemptions

Licensing regulation plays a critical role in ensuring the integrity and legality of real estate and mortgage lending activities. This article focuses on activities that require licensing and the corresponding exemptions.

Who must be licensed

Any person who engages in the business of a real estate broker or salesperson within the state or acts or advertises as such. Any person who acts or advertises as a mortgage loan originator within the state you must have a license. Licensing Activities (Business and Professions Code 10130, 10131-2)

A person must have a real estate license to do any of the following activities for another person, in exchange for compensation, and in connection with real property or business opportunity:

  • Buy or sell.
  • Request sellers or buyers.
  • Request listings.
  • Negotiate sales or exchanges.
  • Lease or rent.
  • Collect rents.
  • Solicit borrowers or lenders.
  • Perform services for borrowers or lenders.
  • Buy, sell or exchange sales contracts or notes while performing services for holders. Comparable activities involving advance fees, specific types of securities, and mineral, oil and gas properties also require a license. Unlicensed assistants can perform delegated tasks, such as:
  • Place signs.
  • Handle correspondence.
  • Prepare disclosures.
  • Help at open days. License Exemptions (Business and Professions Code 10131.01, 10133, 1033.1-1033.5)

The following parts are exempt of real estate license:

  • Hotel, motel, car and trailer park managers.
  • Resident managers of apartment buildings or their employees.
  • Any person who manages reserves or money for temporary occupations on behalf of another person.
  • Employees of a residential property management company supervised by a broker of the property management company or a real estate salesperson licensed by the broker who perform the following activities: • Show rental units and common areas to prospective tenants. • Provide or accept pre-printed rental applications. • Answer questions from potential tenants about the application. • Accept deposits or fees for credit checks or administrative costs. • Accept security deposits and rents. • Provide information on rental rates and lease provisions as set forth in a schedule provided by an employer. • Accept signed leases and rental agreements from prospective tenants.
  • Corporate officers or general partners who conduct licensed activities in connection with property owned by the company without special compensation.
  • Persons acting under a power of attorney from the property owner.
  • Lawyers who provide legal services to a client.
  • Trustees acting under the authority of a deed of trust.
  • People employed by certain types of financial institutions.
  • Licensed lenders.
  • Cemetery authorities.
  • Licensed securities brokers.
  • Employees of certain HUD-approved organizations.
  • People who provide office help.
  • Certain transactions involving FCC regulated properties, MOG (Mineral, Oil, Gas) properties and film locations.
  • Outdoor advertising representatives in transactions related to the placement of signs. Compensation (Business and Professions Code 10136-38; ref 156-7; CCR 2726; CC 1624(d))

In order to claim compensation for carrying out an activity that requires a license, a person must have been properly licensed at the time of the activity and be able to prove it. No person may employ or compensate an unlicensed person for performing any activity requiring a license, with the exception that a licensed broker can pay a commission to a broker licensed in another state. The broker under which a seller is licensed is the only person who can employ or compensate that seller. A licensed seller cannot compensate another licensee except through the broker under which that licensee is licensed. Violation of compensation rules is subject to license suspension or revocation; It is also a misdemeanor punishable by a fine.

Legal and Tax Disclaimer

Please be advised that the content presented in this blog is for informational purposes only and should not be construed as legal or tax advice. The articles and information provided here are written from the perspective of a real estate agent affiliated with Keller Williams, and do not represent legal or tax counsel.

As the author, I am a licensed real estate professional under Keller Williams, holding Brokerage DRE License Number: #02197031. However, it is important to note that my expertise is in the field of real estate, and not in legal or tax matters. The insights and opinions shared on this blog are based on my experiences and knowledge in the real estate industry and should be treated as general guidance rather than definitive legal or tax advice.

For specific legal or tax concerns relating to any real estate transactions or investments, readers are strongly encouraged to consult with a qualified attorney or tax advisor who can provide tailored advice based on your individual circumstances and the latest legal and regulatory requirements.

The information on this blog is provided "as is" without warranty of any kind, and I, along with Keller Williams and its affiliates, disclaim all liability for any loss, damage, or misunderstanding arising from reliance on the information contained herein.

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