Guidelines for the Use of Unlicensed Employees and Online Chat Providers - Real Estate Commission
Real estate brokers are required to exercise reasonable and adequate supervision over the provision of real estate brokerage services by any other individual acting on behalf of the broker. Md. Code Ann., Business Occupations and Professions §17-320(c). Real estate brokers are similarly responsible for the supervision and control of activities performed by their employees or agents in their name during the course of a transaction for which a real estate license is required, whether or not the actual activities performed require a real estate license.
COMAR 09.11.05.03B sets out factors to be considered by the Commission when determining whether supervision is adequate and reasonable. One of the enumerated factors is whether the brokerage firm has written policies and procedures which provide clear guidance regarding the "use and limitations of unlicensed personal assistants." COMAR 09.11.05.03B(1)(c)(5).
In 1995, the Real Estate Commission issued guidelines for the use of unlicensed employees to help facilitate the broker's duty to supervise activities during the course of a transaction for which a real estate license is required. Since that time, brokerage practices have change and evolved in response to new technology. The Guidelines, republished below with minor edits, remain applicable to new technologies, such as online chat activity conducted by an employee or third party operating pursuant to a service agreement to provide chat services on behalf of a broker (chat provider). For example, a chat provider is permitted to, on behalf of a licensee:
- direct a client to a licensee,
- Arrange the date and time of home, termite, and well/septic inspection, mortgage application, pre- settlement walk-thru, and settlement, or
- Schedule an open house or appointment for a licensee to show a listed property.
The restrictions enumerated below also remain applicable in the chat provider context. Brokers should be especially diligent in ensuring that chat providers are not soliciting customers with respect to a specific property.
Brokers should also note that all laws and regulations related to advertising apply equally to the Internet and associated technologies. It is imperative that online consumers know when they are dealing with a real estate licensee and are able to identify the brokerage where the licensee can be found. In the chat context, it is recommended that disclosure of the broker's name or the company name as it appears on the license should be made during the chat session or in text visible on the same web page that contains the chat session. It is also recommended that disclosure should be made prior to providing, or offering to provide, services related to a transaction for which a real estate license is required. Generally, chat providers should refrain from giving the impression that they are licensed. Finally, it is recommended that each brokerage develop and maintain a written policy regarding use of Internet advertising by its associate brokers, sales agents, employees, and agents.
These Guidelines are intended to assist licensees and help them achieve compliance with the requirements of the Real Estate Brokers Act and regulations promulgated thereunder. The Guidelines are not intended to broaden or limit the definition and scope of "provide real estate brokerage services" as defined in the Maryland Real Estate Brokers Act.
OFFICE OF THE ATTORNEY GENERAL
DEPARTMENT OF LABOR
500 NORTH CALVERT STREET - 4TH FLOOR
BALTIMORE, MARYLAND 21202
GUIDELINES ON THE USE OF UNLICENSED EMPLOYEES
An unlicensed employee MAY:
- Answer the telephone and forward calls to a licensee.
- Submit listings and changes to a multiple listing service.
- Follow up on loan commitments after a contract has been negotiated.
- Assemble documents for closing.
- Secure documents (public information) from courthouse, public utilities, etc.
- Have keys made for company listings.
- Write and place ads subject to the review and approval of licensee and supervising broker.
- Type contract forms at the direction of, and for approval by, licensee and supervising broker.
- Compute commission checks.
- Place signs on property.
- Arrange the date and time of home, termite, and well/septic inspection, mortgage application, pre- settlement walk-thru, and settlement.
- Prepare flyers and promotional information for approval by licensee and supervising broker.
- Act as courier service to deliver documents, pick up keys, etc.
- Schedule an open house.
- Schedule appointments for licensee to show listed property.
- Accompany a licensee to an open house or showing for security purposes or to hand out preprinted materials.
- Contact clients and potential clients using online communication methods such as web-based chat in order to accomplish one of the above-listed tasks.
An unlicensed employee MAY NOT:
- Prepare promotional materials or ads without the review and approval of licensee and supervising broker.
- Show property.
- Answer any questions on listings, title, financing, closing, etc.
- Discuss or explain a contract, listing, lease, agreement, or other real estate document with anyone outside the brokerage.
- Be paid on the basis of real estate activity, such as a percentage of commission, or any amount based on listings, sales, etc.
- Negotiate or agree to any commission, commission split, management fee, or referral fee on behalf of a licensee.
- Discuss the attributes or amenities of a property, under any circumstances, with a prospective purchaser or lessee.
- Discuss the terms and conditions of the real property offered for sale or lease with the owner of the property.
Collect, receive, or hold deposit monies, rent, other monies, or anything else of value received from the owner or lessee of the real property or from a prospective purchaser or lessee.
- Provide owners of real property or prospective purchasers or lessees with any advice, recommendations, or suggestions as to the sale, purchase, exchange, or lease of real property to be listed or real property presently available for sale or for lease.
- Hold himself or herself out in any manner, orally or in writing, as being licensed or affiliated with a particular company or real estate broker as a licensee.
- Contact the public concerning the availability of real estate brokerage services unless an inquiry about a specific property is immediately referred to a licensee.
- Contact clients or prospective clients using online communication methods such as web-based chat in order to solicit customers with respect to a specific property.
- Contact clients using online communication methods such as web-based chat without first disclosing the broker's name or the company name as it appears on the license at the beginning of the chat session or in text visible on the same web page that contains the chat session.
(NOTE THAT THE WORD "LICENSEE" AS IT APPEARS IN THE GUIDELINES MEANS A LICENSED ASSOCIATE BROKER OR SALESPERSON AFFILIATED WITH AND ACTING UNDER THE SUPERVISION OF A BROKER. AN INDIVIDUAL WHO HOLDS A LICENSE, BUT IS AFFILIATED WITH A DIFFERENT BROKER IS CONSIDERED TO BE UNLICENSED FOR THE PURPOSES OF THESE GUIDELINES.)