Skip to Content

Brokers and sales agents often use unlicensed personnel for assistance in conducting their real estate brokerage activities. Such unlicensed persons, sometimes referred to as administrative assistants, can be of great help to a busy agent. However, care must be taken to ensure that the unlicensed person does not conduct any of the activities for which a real estate license is required. This article defines some of those activities which may and may not be legally conducted by unlicensed persons.

Sections 1101.351(a) and 1101.758 of The Real Estate License Act establish that it is a crime for an unlicensed person to engage in activity for which a real estate license is required. The broker or sales agent that employs an unlicensed person might be criminally charged for the crime as well. In addition, TREC may take disciplinary action against a broker or sales agent that pays or associates with an unlicensed person who engages in activities that require a real estate license. Authority for this disciplinary action is set out in Sections 1101.652(b)(11) and (26) of the License Act. For these reasons, it is important to distinguish between those activities that do and those that do not require a real estate license. Section 1101.002(1)(A) of the License Act sets forth a list of activities that require a license and are worthy of a close reading.

Preliminarily, the real estate brokerage activities must be "for another" person or entity. This means that persons who are buying, selling or leasing their own property do not need a license; they are acting for themselves and not for another person. The activities must also be for a fee or something of value, or with the intention of collecting a fee or something of value. This means, for example, that an unlicensed person whose neighbor has been transferred out of state may solicit tenants and negotiate a lease on behalf of the neighbor so long as the person does not receive or expect to receive anything of value for helping.

The list of activities requiring  a license may be summarized and placed in two categories (but remember, this is a summary only and not all inclusive). First are those activities in which a person directly helps another buy, sell, or lease real property. These activities, such as negotiating a listing agreement with a property owner, spending the afternoon with a couple showing houses for sale or rent, or negotiating a contract to buy or lease real property, obviously require a license. These "direct" activities are seldom the subject of debate or controversy.

The second category of activities might be referred to as "indirect" activities and are more troublesome. Section 1101.002(1)(A)(viii) of the License Act requires a license for anyone who procures or assists in procuring prospects to buy, sell, or lease property. Section 1101.002(1)(A)(ix) of the License Act requires a license for anyone who procures or assists in procuring properties to be bought, sold, or leased. If the words "assist in" were read broadly enough, virtually everyone working in a real estate office would need a license. Common sense dictates, however, that many activities can be legally conducted in a real estate brokerage office that do not require a license. There may sometimes exist only a thin line between those activities that require a license and those that do not. The following Q & A discussions may help license holders accurately draw this line.

Q: May an unlicensed person, identified as such, make calls to determine whether a person is interested in buying or selling property, or has property they wish to sell, and if so, make an appointment for a licensed agent to talk to them?

A: No. Often referred to as "telemarketing," any such activities conducted in Texas must be conducted by a license holder. In Tex. Atty. Gen. Op. H-1271 (1978), the attorney general concluded that a license was required. Also, Commission Rule 535.4(f) makes it clear that all solicitation work must be conducted by license holders.

Q: May an unlicensed person open doors for prospective buyers or tenants?

A: No. Rule 535.4(c) states that a person must be licensed as a broker or sales agent to show a broker's listings. An unlicensed assistant cannot perform any activities for a license holder that requires a license, and therefore, cannot "show" a property. This rule was amended last year to clarify that to “show” includes opening doors, allowing access to a property or hosting an open house. Bottom line, an unlicensed assistant cannot show property for a license holder; this includes providing access to homes for sale and for lease.

This is a change from a previous interpretation that was contained in an old article regarding unlicensed assistants. After the criminal background check requirement became law, that interpretation became outdated and was no longer correct. Also, most license holders agree that many unlicensed assistants that did open properties for prospective buyers in the past offered information or answered questions about the property or neighborhood that clearly crossed the line into brokerage activity.

Bottom line, an unlicensed assistant cannot show property for a license holder; this includes providing access to homes for sale and for lease.

Q: May unlicensed assistants set appointments to show a listing?

A: Yes. Under the general rules stated above, it is permissible for an assistant to call a homeowner and schedule an appointment for the broker to bring a potential buyer to see the home.

Q: May the unlicensed assistant host an open house?

A: No, effective December 20, 2016, the Commission changed the rules so that an unlicensed assistant can no longer host an open house.

Q: May the unlicensed assistant place "for sale" signs or place newspaper advertisements as directed by the broker?

A: Yes, subject to the following guidelines. Commission Rule 535.5(g) provides that answering the telephone and acts of a clerical or secretarial nature do not require a license. Clerical or secretarial employees need not be licensed so long as they do not engage in solicitation and do not hold themselves out as licensed agents. Further, Commission Rule 535.5(g) also states that an unlicensed clerical or secretarial employee, identified to callers as such, may confirm information concerning the size, price and terms of property advertised. Taken together, this means that an unlicensed person may, after identifying himself or herself as an unlicensed person, confirm information previously advertised to callers or persons dropping by. The unlicensed person should not give information about properties other than that inquired about, and should refer any requests for information regarding other properties to a licensed agent. For example, the assistant might confirm that a particular property called about has three bedrooms and one bath, as previously advertised; however, the assistant may not attempt to identify properties which instead have two baths and bring these to the attention of the caller. Such questions must be referred to a license holder. The assistant should not attempt to "qualify" the caller in any respect. Many other duties that are administrative in nature can be safely performed, such as inputting data into a computer or typing contracts, but, only as specifically directed by a license holder. Support personnel can order supplies, schedule maintenance, and all the other things that are involved in keeping the office open. Bookkeeping and office management functions may be performed by an unlicensed assistant, as discussed immediately below.

Q: What functions may an unlicensed office manager perform?

A: Unlicensed persons may perform administrative tasks such as training or motivating personnel, and those tasks dealing with office administration and personnel matters. An unlicensed person may serve as bookkeeper for the company. However, only a license holder may be a signatory on brokerage trust accounts under Commission Rule 535.146(c)(7). An office manager may also serve as a trainer. However, Commission Rule 535.4(d) states that an unlicensed person may not direct or supervise agents in their work as license holders. Therefore, an unlicensed person may not direct or advise agents in their attempts to help others buy, sell, or lease property. They may not review contracts, or help make "deals" work. These tasks are properly conducted only by licensed persons.

Q: May unlicensed persons assist in arranging financing?

A: Yes; however, great care must be taken that the person acts solely in an administrative capacity. An unlicensed assistant may be directed by a broker or sales agent to assist a particular buyer in obtaining information and forms to apply for and qualify for a loan. However, these acts should be at the direction of a license holder. Mortgage brokers and loan originators are licensed by the Texas Department of Savings and Mortgage Lending, and any questions regarding the requirements for licensure for persons dealing with financing issues should be directed to that agency.

Q: May unlicensed persons serve as property managers for rental properties?

A: Those who hold themselves out as "property managers" for others and for compensation must be licensed, provided the person also rent or leases the property for the property owner. In addition, Section 1101.002(1)(A)(x) of the License Act requires a license for a person who controls the acceptance or deposit of rent from a resident of a single-family residential real property unit. Section 535.4(g) of the Commission Rules provides that a person controls the acceptance or deposit of rent if the person has the authority to use the rent to pay for services related to management of the property or has the authority to deposit the rent into a trust account and sign checks or withdraw money from the account. Many property management activities, such as bookkeeping and arranging for repairs, do not generally require a license. However, only a license holder may be a signatory on brokerage trust accounts under Commission Rule 535.146(c)(7). So long as an unlicensed person carefully limits his or her property management activities to those which do not require a license, neither criminal charges nor Commission disciplinary action would be warranted. Note that persons acting as on-site managers at apartment complexes are exempt from licensure under Section 1101.005(7) of the License Act.

Q: What can a license holder do to avoid criminal or disciplinary actions?

A: First, a broker should NOT let his or her license or any of sponsored sales agents' licenses lapse. The lapse of a license, often inadvertent, is a common basis for disciplinary action on the grounds of improper unlicensed activity. Second, analyze any new factual situation according to the rules above to determine the extent to which the unlicensed person is being allowed to act with discretion, and how close the unlicensed person is "directly" assisting others in buying, selling, or leasing property. If still troubled, contact your attorney. You may also contact the Commission for an informal opinion based on a particular fact situation. Managing brokers might gain some protection from disciplinary action by establishing written guidelines and training dictating to both their agents and unlicensed personnel what is allowed and not allowed of non-license holders.

As always, you should contact your attorney regarding matters raised by this article. You may also wish to ask your attorney for advice regarding potential civil or criminal liability for acts performed by unlicensed persons.