April 6, 2018 | Kristin Rosan, Madison & Rosan, LLP | Hondros College Contributor
Managers of multi-unit residential rental properties invariably will need to utilize unlicensed staff in performing services for their landlord clients. Brokers routinely inquire about what their unlicensed staff can and cannot do in the course of property management. This article clarifies those activities that unlicensed staff can perform and those activities only a licensed professional (salesperson or broker) may perform.
Regardless of whether the staff is unlicensed or licensed, all staff must work under the supervision of a licensed real estate broker. For unlicensed staff, their salary should be hourly, or salary based, and not calculated as a percentage of revenue or commission based.
Ohio law permits unlicensed staff to perform the following services on behalf of the broker:
Clerical or administrative tasks
Collecting rent and/or security deposits (checks should be made payable to the real estate brokerage or landlord)
Showing units to prospective tenants
Furnishing published information
Supplying applications and leases
Receiving applications and leases for submission to the brokerage or landlord
Only a licensed professional may perform the following services:
Negotiating contracts or lease agreements
Vary or deviate from the rental price and/or other policies previously established by the brokerage or landlord
Approve lease agreements or settle or arrange terms and conditions of a lease on behalf of the brokerage or landlord
Offer inducements (or concessions) to prospective tenants unless they are part of a published promotional program previously approved by the brokerage or landlord
Interpret or provide an opinion concerning the terms and conditions of a lease agreement
Hold self out as having authority and ultimate responsibility for management of the property
The general rule of thumb is unlicensed staff must provide services in a ministerial or administrative capacity. They do not have the authority to make decisions or otherwise deviate from the policies, procedures and forms set forth by the brokerage and landlord. Only licensees may negotiate, make decisions and compromise issues with tenants.
The consequences for unlicensed staff for acting like a licensee without a licensee can be financially devastating. The Commission can impose a fine up to $1000.00 per day a violation occurs or continues. For real estate brokers, they can be subject to sanction for suborning unlicensed activity.
For all property managers, it is prudent to double check the activities your unlicensed staff are performing, to verify they are services the law permits them to perform. Policy manuals for unlicensed staff may aid in confirming what actions can be performed by unlicensed staff and which require the attention of the broker or landlord.