Legal Question in Real Estate Law in California

Realtor without a license

My dad unknowingly signed an agreement with an unlicensed realtor. His business card states he deals with property management and investments. I called the Dre and they said he is not licensed. The contract clearly states that he is to receive a 5% commission. Another realtor has a buyer on this same property which has been in escrow over four months, but the unlicensed realtor is not in the escrow instructions. I will file a complaint with the Dre but it sounds like they are going to give him a slap on the wrist at best. My immediate concern is his attempts at stealing the rents. He told the current tenant that he is the new owner�s rep. and rents are to be paid to him. I spoke to the police and they seem worthless; unless he actually takes the rents (they said that would constitute grand theft). I have spoken to this man on the phone and told him he is not to have anything to do with renting units or collecting rents. He denied trying to steal the rents but I do not believe him. Should I formally fire this man in writing, and inform him that he is not to enter the property at all? Should I also tell him that he has been reported to the Dre, and the police, or should I let him steal the rents and file a complaint of grand theft?


Asked on 3/09/07, 12:18 pm

2 Answers from Attorneys
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: Realtor without a license

First, a technical matter. The term "Realtor" is a trademark of a national association of licensed real-estate professionals who subscribe to that organization's supposedly higher standards of training, experience and professional conduct. Someone with no license is not a Realtor. The term is widely used, although erroneously, to refer to anyone in the real estate business.

Without seeing the actual agreement your dad signed, I'll have to be a bit cautious in concluding that the individual is engaging in activities for which a license is required. I suggest you look up Business and Professions Code section 10131 and see if the guy's activities require a license, with particular reference to 10131(b) which deals with leasing and rental activities. Then look at B&P section 10131.01(a) containing limited exemptions for the resident manager of an apartment building.

Note that 10131 "requires" the DA of every county to prosecute violations. See 10139 re punishment for offenses.

Next, I'd suggest reading sections 890 through 893 of the Civil Code regarding "rent skimming" in case this may be going on.

Finally, the DRE has a victims of fraud restitution program; if your dad suffers an actual loss, he might be eligible to recover up to $25,000 of proven losses from a DRE fund.

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Answered on 3/09/07, 1:00 pm
Daniel Harrison Berger Harrison, APC

Re: Realtor without a license

Definitely would need to review the contract. Is this person getting 5% of the rents for managing the property? Or is he getting 5% commission on the sale of property? Big difference. You don't need to be licensed by the DRE to get paid for collecting rent for people.

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Answered on 3/09/07, 10:04 pm


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