OREC Executive Director Grant Cody answered a few of our frequently asked questions!
Can a Real Estate agent sell properties that he/she owns outside their broker supervision?
Yes, in some circumstances a real estate agent may sell properties the agent owns outside the supervision of the agent’s broker. If a real estate agent is selling properties the agent owns, the agent may be acting as a bona fide owner. As a bona fide owner, under 59 O.S. § 858-301, licensing is not required.
If the transaction falls into licensing exceptions, then an agent can sell, lease, or manage any properties the agent owns outside the supervision of the agent’s broker.
However, the test of this question is context specific and depends on whether the agent is acting as a licensee or as an owner during the transaction in question. If the licensee is acting in the capacity of a licensee, under the Okla. Admin. Code § 605:10-9-4, the agent must disclose they are licensed in any advertising, and under § 605:10-17-4(22) the transaction should be completed under the supervision of the agent’s broker.
A clear case of acting as an owner would be if the licensee has engaged a separate agent to sell his or her personal property and pays a commission to the agent. It is less clear when an owner licensee is acting as a licensee because Oklahoma case law and published Attorney General opinion indicate that a licensee is entitled to sell property without a broker, which includes “receiving offers and counteroffers directly.” Okla. Att’y Gen. Op. No. 06-1, ¶¶ 6-7 (Feb. 14, 2006).
If a licensee is performing services that can only be provided by virtue of their license, it is likely the Agent is acting as a licensee instead of an owner and is within the purview of the Broker’s supervision.
Can a real estate agent be a member of a LLC that buys and sells real estate?
Yes, a real estate agent can be a member of an LLC that buys and sells real estate; however, under the Okla. Admin. Code § 605:10-15-1 the Agent must disclose the interest to his or her broker.
Does the real estate agent need permission from their broker to buy and sell properties outside their broker supervision?
No, in some circumstances an agent does not need permission from their broker to buy and sell properties outside their broker supervision. As with selling personal property, the test of whether activity can be performed outside the broker supervision is context specific.
The agent does not need broker permission if the agent is acting as an owner, “partner, officer or employee[] of any partnership” and not as an Agent. 59 O.S. § 858-301.
If the agent is acting as a licensee, under the Okla. Admin. Code § 605:10-17-4(22), the agent cannot perform licensee activity outside the broker’s supervision. An agent should carefully evaluate their activities to determine if they are acting in a capacity as a licensee, or they are acting as a member or employee of an LLC when undertaking their duties.
Can a real estate agent help their husband or wife promote and sell properties that the husband or wife owns?
An agent is not prohibited from promoting and selling properties the agent’s spouse owns; however, the arrangement requires additional disclosures and restricts recovery avenues for the spouse.
Under the Okla. Admin. Code § 605:10-17-4(20), family relationships must be disclosed during the transaction. Under 59 O.S. § 858-603(B)(1) a spouse cannot recover from the Oklahoma Real Estate Education and Recovery fund if a judgment is against the claimant’s spouse.
Additionally, assuming the agent is not a co-owner with the spouse, it is likely the agent cannot assert an exception from licensing as a property owner. Without the licensing exception, the agent’s activity would need to be performed under the supervision of the broker.
Can a real estate agent help sell a FSBO property if they do not have ownership of the property?
A real estate agent might be able help sell a FSBO property if they do not have ownership of the property, based on a parallel to acceptable broker actions. This question is largely fact dependent on a case by case basis and depends on a number of variables such as what the owner has agreed to.
Based on Okla. Att’y Gen. Op. No. 06-1, a broker that presents an offer to an unrepresented buyer is not required to assist the buyer; however, the opinion does not specifically indicate that the broker is prohibited from assisting. The opinion appears to create permissive authority for a broker to assist an unrepresented party.
Similarly, there may be permissive authority for an agent to help sell a FSBO property even if the agent does not have ownership of the property. However, under the Okla. Admin. Code § 605:10-9-4(a)(6) a Real Estate Agent can only advertise a property for sale with “the permission of the owner or the owner’s authorized representative.”
Additionally, the permission must have a defined expiration date. This indicates that an agreement would need to be in place between the FSBO property owner and the Broker prior to any attempt to assist by advertising a property.