The California Bureau of Real Estate (CalBRE) has recently issued an alert, advising agents that it is taking notice of salespersons who may be acting as or advertising themselves as “independent” real estate licensees. Under California’s licensing system, salespersons must always “hang” their license with and work under the supervision of a licensed real estate broker. It is unlawful for a salesperson to conduct licensed real estate activity on his or her own. Further, real estate brokers are required to supervise all salespersons licensed under them.
CalBRE is primarily concerned with two activities. First – property management. A question that is often heard on the C.A.R. Hot Line is “Can a salesperson operate a property management business on his own?” The answer is NO! A property management business must always be operated under the supervision of a licensed real estate broker.
Second – branding as independent licensees. Beginning this year, salespersons have been able to use “team names” and to obtain and use “salesperson-owned fictitious business names.” Perhaps due to this change in the law, CalBRE is noticing an upsurge in salespersons branding themselves as independent real estate professionals and acting as such, which is a real estate law violation. CalBRE is also alerting brokers that facilitating such activity by a salesperson is likewise a real estate violation.
Salespersons can use team names and own and use fictitious business names but only when following the legal requirements and when affiliated with and operating under the supervision of a broker. C.A.R.’s Legal Q&A “Fictitious Business Names and Team Names,” will help REALTORS® make sure they are following the law. CalBRE has also issued guidance on this.