Commissioner Steve Strode-December 2022
The real estate industry is dynamic, entrepreneurial, and highly competitive. This environment fosters new business practices and entrants to the marketplace continuously — sometimes to differentiate between competitors, other times to improve service to consumers.
The Oregon Real Estate Agency periodically receives inquiries from stakeholders about whether a particular activity complies with the law. Occasionally it is out of concern about the behavior of another licensee, and occasionally it is to get permission from the Agency before introducing a new product or service.
With respect to providing information about new products or services, Agency staff does not approve new business models and we cannot offer legal advice. If we receive such an inquiry, we will attempt to provide direction to applicable statutes and rules. However, a licensee should always consult with an attorney if uncertain — especially since their plan could intersect with other state or federal laws that are not under the Agency's jurisdiction.
Another type of general inquiry we receive periodically is when one licensee asks if another licensee's behavior violates law or rule. The goal may be to communicate an official Agency position back to the other licensee in order to stop the behavior without needing to file a complaint. Here, too, we may only be able to cite relevant statutes or rules but not offer a definitive opinion. The reason for this rests with our obligations under
Oregon Administrative Rules (OAR) 863-027-0010. For the Agency to determine if a violation of statute or rule has occurred, the Agency “shall gather all relevant facts in an objective, impartial, and unbiased manner." This includes giving both a complainant and respondent an opportunity to provide any “facts which may be exculpatory or mitigating." Put another way, both sides get to tell their story.
The Agency has received a number of inquiries relating to both the use of unlicensed personal assistants and the use of licensees to show property on behalf of a licensee from another registered business.
Professional Real Estate Activity
Individuals engaged in professional real estate activity must be licensed unless they are specifically exempt by statute.
Oregon Revised Statute (ORS) 696.010 (17) states:
"Professional real estate activity" means any of the following actions, when engaged in for another and for compensation or with the intention or in the expectation or upon the promise of receiving or collecting compensation, by any person who:
(a) Sells, exchanges, purchases, rents or leases real estate
(b) Offers to sell, exchange, purchase, rent or lease real estate;
(c) Negotiates, offers, attempts or agrees to negotiate the sale, exchange, purchase, rental or leasing of real estate;
(d) Lists, offers, attempts or agrees to list real estate for sale;
(e) Offers, attempts or agrees to perform or provide a competitive market analysis or letter opinion, to represent a taxpayer under ORS 305.239 or 309.100 or to give an opinion in any administrative or judicial proceeding regarding the value of real estate for taxation, except when the activity is performed by a state certified appraiser or state licensed appraiser;
(f) Auctions, offers, attempts or agrees to auction real estate;
(g) Buys, sells, offers to buy or sell or otherwise deals in options on real estate;
(h) Engages in management of rental real estate;
(i) Purports to be engaged in the business of buying, selling, exchanging, renting or leasing real estate;
(j) Assists or directs in the procuring of prospects, calculated to result in the sale, exchange, leasing or rental of real estate;
(k) Assists or directs in the negotiation or closing of any transaction calculated or intended to result in the sale, exchange, leasing or rental of real estate;
(L) Except as otherwise provided in ORS 696.030 (12), advises, counsels, consults or analyzes in connection with real estate values, sales or dispositions, including dispositions through eminent domain procedures;
(m) Advises, counsels, consults or analyzes in connection with the acquisition or sale of real estate by an entity if the purpose of the entity is investment in real estate; or
(n) Performs real estate marketing activity as described in ORS 696.600.
The list of exemptions for requiring a license can be found in
ORS 696.030.
Unlicensed Personal Assistants
If you employ an unlicensed personal assistant, you must ensure that the assistant does not engage in professional real estate activity.
A few examples of permissible activity by an unlicensed assistant including the following:
- Answer phone, take messages, and forward calls.
- Provide information about a property limited to the information contained in advertising.
- Check on the progress of required financing in a transaction.
- Check with escrow company to track status of a file.
- Schedule appointments for showings, inspectors, or appraisers.
- Assist a licensee at an open house, limited to handing out marketing materials and providing information contained in advertising.
Some examples of impermissible activity by a personal assistant include the following:
- Answer questions about provisions in a transaction document.
- Hold an open house without a licensee present.
- Engage in transaction negotiations.
This is not a comprehensive list; always refer to ORS 696.010(17) when determining if an activity is permissible or impermissible. To help illustrate, you may wish to ask yourself the following, “If a complaint was received by the Agency alleging that my unlicensed assistant was engaging in professional real estate activity, would I be able to readily refute that allegation?"
Compensation Between Brokers
Another inquiry we've received recently relates to one licensee enlisting the help of a licensee from another registered business to show properties. As mentioned, we do not review and approve the cooperating agreements between companies — but we can point licensees to relevant statutes and rules that may apply to their business practice.
First, you may look to ORS 696.010(6) for the definition of compensation.
Compensation means valuable consideration for services rendered or to be rendered, whether contingent or otherwise.
In terms of structuring compensation between registered businesses, please remember that ORS 696.301(2) provides grounds for discipline if a licensee:
Represented, attempted to represent or accepted compensation from a principal real estate broker other than the principal real estate broker with whom the real estate broker is associated. (See ORS 696.301 for full statute.)
As a reminder, before entering into any agreements between registered businesses, all licenses should consult with their supervising principal broker — and obtain legal advice as needed.