Under Cal. Bus. & Prof. Code § 10137, It is unlawful for any licensed real estate broker to employ or compensate, directly or indirectly, any person for performing any of the acts requiring a license, who is not a licensed real estate broker, or a real estate salesperson. Simply stated, unlicensed persons are not entitled to real estate commissions. A broker may share a commission with the principal who is not performing services for which a license is required. See Williams v. Kinsey, (1946) 74 Cal. App. 2d 583. However, unlicensed persons, performing services requiring a license may not be compensated. That is not to say that certain services performed by unlicensed persons could not be compensated. For example, property managers gathering financial data or rent schedules could be compensated as those services are not such as to require a license. See Venturi & Co. LLC v. Pacific Malibu Development Corp. (2009) 172 Cal. App. 4th 1417, 1422. Thus, if escrow instructions call for the compensation of unlicensed individuals, then that compensation must be scrutinized to ensure that the unlicensed person is not being paid for services rendered requiring a license.
If you are a real estate agent or broker, or if you are a buyer or seller of property and have questions regarding real estate commissions, contact one of our Los Angeles Real Estate Attorneys today for a free consultation and case evaluation.