Can a non-licensed investor hire an agent as a runner

Question

Hi, I'm in California, my wife and I are real estate investors (both unlicensed) I'm looking to hire a licensed agent to do some tasks for our company, mostly driving to look at properties, taking pictures, dropping off and picking up contracts and meeting with sellers. All these activities could be done by anyone and none of the activities are things that require an agent.. but some of the better candidates I'm interviewing happen to also be agents. I will be speaking to a local real estate attorney about this but I wanted to see if BP had any experience with this.

If I write up a work contract to hire this person and pay them a percentage of the deal once we close it, is that asking for trouble?

They aren't finding any of these leads for us and mostly doing errands but I just don't want to fall under the BRE thumb as paying commissions to an agent or some unlicensed activity (i don't know all the rules). I just don't have the capital or resources to pay this person hourly and manage a timesheet, so I'd like to setup our agreement to be upon deals that we close together. Let me know your thoughts if you've structured work agreements like this? Maybe it's not a problem at all, I just don't know.

Michael Merritt · Answer

Thanks Jeff, that's a pretty broad definition. I'm not even sure if taking pictures of properties would be allowed under that definition. I'll work with my attorney. Appreciate it!

Jeff Copeland · Answer

If they are doing hourly or salaried work that is not "the practice of real estate", then you're fine.

For anything that falls within "the practice of real estate" in your state, you most likely would have to pay their broker/brokerage - so they would need to have a sit down with their broker about how the fees would be allocated between the broker and the agent on the receiving end.

In California, the practice of real estate is defined as:

"a person who, for a compensation or in expectation of a compensation, regardless of the form or time of payment, does or negotiates to do one or more of the following acts for another or others:

(a) Sells or offers to sell, buys or offers to buy, solicits prospective sellers or puchasers of, solicits or obtains listings of, or negotiates the purchase, sale or exchange of real property or a business opportunity.

(b) Leases or rents or offers to lease or rent, or places for rent, or solicits listings of places for rent, or solicits for prospective tenants, or negotiates the sale, purchase or exchanges of leases on real property, or on a business opportunity, or collects rents from real property, or improvements thereon, or from business opportunities.

(c) Assists or offers to assist in filing an application for the purchase or lease of, or in locating or entering upon, lands owned by the state or federal government.

(d) Solicits borrowers or lenders for or negotiates loans or collects payments or performs services for borrowers or lenders or note owners in connection with loans secured directly or collaterally by liens on real property or on a business opportunity.

(e) Sells or offers to sell, buys or offers to buy, or exchanges or offers to exchange a real property sales contract, or a promissory note secured directly or collaterally by a lien on real property or on a business opportunity, and performs services for the holders thereof."

Can a non-licensed investor hire an agent as a runner

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