Today, we are presenting another outstanding offering by an industry leader, Wayne Bell. In the article, Wayne discusses the California laws concerning lawyers brokering properties. Interestingly, I have had the privilege of doing DRE license preparation classes for lawyers across the state. Yes, many of them read too much into every question, but they are a pleasure to have in a seminar.
In California, a Licensed Lawyer Cannot Act in the Capacity as a Real Estate Broker Without a Separate Broker’s License
| By Wayne S. Bell Former CA Real Estate Commissioner; California Real Estate Broker; California Attorney; Co-Founder, Chief Advocacy Officer, and General Counsel – Real Estate Advocacy Alliance |
The question addressed in this very brief article is: Can a licensed lawyer engage in real estate broker licensed activities in the State of California without needing a separate real estate broker’s license?
The simple answer is no.
But there are some finer points on real estate broker and lawyer licensed activities in California that need to be made (please continue reading).
A Few Background Notes and Comments on other States:
It seems that in some States, lawyers may be able to act as a real estate broker without a specific broker’s license. Obviously whether and where they can act as a broker depends on the laws and regulations of the jurisdiction where they practice.
Moreover, it appears that some States exempt lawyers from certain real estate licensing requirements.
And some jurisdictions have “single transaction” exemptions from brokerage licensing requirements.
Yet none of those things matter or apply in California.
In California, the starting point is section 10131 of the California Business and Professions Code, which defines a real estate broker by listing the activities that require a real estate license when performed on behalf of another or others for compensation or in expectation of compensation. The activities include selling, buying, exchanging, or negotiating the sale, purchase, or exchange of real property or business opportunities. It also covers acts like soliciting buyers or sellers, obtaining listings, and negotiating transactions.
Then section 10133 of the Business and Professions Code sets forth specific instances where a real estate license is not required in California. These include when acts are performed by regular corporate officers or general partners of partnerships relative to applicable corporate or partnership property, individuals with a power of attorney from the property owner, attorneys at law, individuals acting under court order, and trustees selling under a deed of trust. These exemptions from the licensing requirements are not applicable if they are used to evade the law.
With regard to the lawyer carve-out, it refers to an attorney at law who is providing legal services for a client. Needless to say, lawyers are often involved in real estate transactions using their lawyer skills, legal training, and law licenses.
Under Business and Professions Code section 10133(a)(3), a licensed lawyer may engage in real estate activities that would otherwise require a real estate broker license if those activities are part of providing legal services to a client. Those activities could include:
- Performing real estate and related transactions
- Preparing contracts
- Offering legal advice on real estate matters
But again, such acts are permitted if they occur in the course of practicing law (e.g., representing a client in a legal matter). And if a lawyer engages in real estate activities outside the scope of practicing law (examples would include acting as a broker for a fee separate from legal services, and collecting commissions as a broker), then the lawyer must obtain a real estate license. Some attorneys choose to obtain a real estate broker license so they can legally perform “non-legal” brokerage-type real estate activities and collect commissions. For instance, I am a California-licensed lawyer and a California-licensed real estate broker.
In California, lawyers are exempt (based on their legal education and training, and status as lawyers) from the standard pre-licensing coursework and educational requirements for a real estate broker license but must still pass the relevant licensing examination and fulfill certain experience requirements and criteria.
Conclusion:
While other States may permit a lawyer to act in the capacity as a real estate broker without needing a separate real estate license, that is not the case in the State of California.
In this State, a licensed lawyer can only act as and in the capacity of a real estate broker with a separate real estate broker’s license.Note: If you have any questions regarding the foregoing or any other requirements of the California Real Estate Law or Commissioner’s Regulations, please contact Tricia Parkhurst or me at Real Estate Advocacy Alliance, at https://reaaca.com/
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