California Real Estate SalespersonLaws of Agency and Fiduciary DutiesHard
A broker employs an unlicensed personal assistant to help with paperwork and scheduling. Which compensation arrangement would violate California Real Estate Law?
- APaying the assistant a percentage of commissions earned on closed transactions
- BPaying the assistant an hourly wage for administrative tasks
- CPaying the assistant a fixed monthly salary regardless of transactions closed
- DPaying the assistant a flat bonus unrelated to any specific sale
Show answer & explanationAnswer & explanation
Correct answer: A. Paying the assistant a percentage of commissions earned on closed transactions
California law prohibits compensating unlicensed individuals based on real estate transaction outcomes, such as a percentage of commission, because this ties pay to activities that require a license. Salary, hourly wage, or flat bonuses unrelated to specific transactions are permissible for unlicensed clerical support.
Why the other options are wrong
- B. Hourly wages for administrative work are lawful.
- C. Fixed salary unrelated to transactions is permissible.
- D. A flat, non-transaction-tied bonus does not violate licensing law.
Unlicensed Assistant Compensation Limits
Unlicensed personal assistants may be paid salary, hourly wages, or flat bonuses, but not commission or transaction-based compensation, which is reserved for licensees performing licensed acts.
- Commission-based pay to unlicensed persons implies unlicensed practice.
- Salary/hourly pay for clerical tasks is lawful.
- Broker remains responsible for assistant's conduct and compliance.
Memory trick: 'No license, no commission slice.'