The issue can happen to realtors representing buyers or sellers. Sellers want agents to help them fix up their property to stage it, while buyers want help getting the property into move-in condition.
Under Business and Professions Code 7026
, every person who performs or offers to perform construction work must be licensed during the performance of the work in California, according to The Law Offices of Peter N. Brewer, a Palo Alto, California-based real estate law firm.
The rule applies to any person acting as contractor, including subcontractors or specialty contractors, and sometimes it applies to material or equipment suppliers, consultants and even architects and engineers.
The firm said the definition of a contractor under the code is very broad, thus making it easy for agents to get in trouble with the California Department of Real Estate and potentially lose their commissions.
The Law Offices of Peter N. Brewer recently wrote an article about the potential pitfalls for real estate agents assisting in home improvement projects. Although it's hard to determine how much liability real estate agents have, the firm explains the possible consequences of agents acting as contractors and provides some guidelines to stay out of trouble.
Click here to read more about the guidelines.
Real estate agents, who are often pressured to close sales on time, may go above and beyond their call of duty by assisting with repairs to properties. While their intentions are good, they may face unforeseen repercussions.