Anyone who wants to sell real estate as a salesperson, real estate agent, or real estate broker must first obtain a license to do so from the state in which they live. State real estate license requirements differ slightly from state to state, but all usually require that an applicant complete a minimal amount of real estate education, submit an application to the state real estate governing organization, and pass a written examination. Only after you have received a state license can you act as a real estate salesperson or agent. If you don't have a license and attempt to buy or sell real estate as an agent, you have committed the crime of practicing real estate without a license.
Practicing Real Estate
While state laws differ slightly, the definition of what it means to practice real estate hinges on whether you act on behalf of someone else in a real estate transaction. Any time you act on someone else's behalf when buying or selling real estate in order to receive a fee, commission, or other type of compensation, you have engaged in the practice of real estate. To do this legally you must be properly licensed. If you are not licensed, you have committed a crime. Also, you cannot engage in real estate negotiations on someone else's behalf or even attempt to conduct a real estate transaction for another person or organization unless you are properly licensed.
Applications
In order to obtain a real estate license, you must submit an application detailing your qualifications, criminal history, and other personal information. If you knowingly submit a false application or purposefully falsify your answers, this too can result in a practicing real estate without a license crime. For example, if you apply for a real estate license and conceal the fact that you have previously been convicted of a crime, you can be convicted of the unlawful practice of real estate even if the state denies your application, as any attempt to attain a license under false pretenses is a crime.
Offenses
In cases where people hold themselves out to be properly licensed real estate agents or brokers, the crime of practicing real estate without a license occurs in each separate transaction. For example, if you have a real estate license in one state, move to another and fail to apply for real estate license in the new state, you cannot act as a real estate agent. If you choose to do so, each transaction you engage in as someone else's broker or agent is considered a separate offense.
For Sale By Owner
While all states require anyone acting as a real estate agent or broker to first obtain a proper license, those laws do not prevent property owners from acting on their own behalf. This means, for example, that you can sell your own property, or buy real estate, without having a real estate license.
Penalties
In some states, the crime of practicing real estate without a license either a misdemeanor or felony offense. In others, the law provides for enhanced penalties for repeat offenders. For example, the state of Kentucky penalizes engaging in real estate brokering without a license for the first time as a misdemeanor offense, while any subsequent acts are charged as felonies. (Kentucky Revised Statutes section 324.990.)
The states provide for various penalties when it comes to the crime of engaging in real estate without a license. A person convicted of this crime will face several potential punishments, though the severity of these will differ depending on the severity of the case.
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Prison or jail. The primary difference between a misdemeanor and a felony crime is the potential length of any jail or prison sentence. Any crime where the potential maximum sentence is up to one year in jail is categorized as a misdemeanor, while one where the potential for a year or more in prison is possible is considered a felony. Depending on the state, a conviction for the unauthorized practice of real estate can lead to maximum penalties ranging from up to a year in jail or four years or more in a state prison.
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Fines. In addition to or apart from any jail or prison sentence, courts can also impose a fine if you are convicted of the unauthorized practice of real estate. Fines differ widely, but misdemeanor fines are typically up to about $1,000, while felony fines can reach $5,000 or more.
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Probation. Courts may also order probation as part of a criminal sentence. When a court orders probation, it allows the convicted person to serve a sentence, typically 12 months or longer, outside of jail or prison. During that time the person on probation has his or her liberties restricted, and must comply with various court orders or conditions of probation. These conditions typically require the probationer to pay all required fines, court costs, and restitution; as well as find or maintain employment, refrain from the further practice of real estate, not engage in any other crimes, and regularly report to a probation officer. A person on probation who fails to meet all the required conditions will face additional penalties, such as higher fines, extended probation periods, or may even have his or her probation revoked and end up serving an incarceration sentence.
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Restitution. If, during the course of acting as a real estate agent, you charge others for your services, a court will likely make restitution a part of the sentence. When you are ordered to pay restitution you have to compensate those who were the victims of your crime for any damages you caused. You must pay restitution in addition to any applicable court costs and criminal fines, and must also do so as a condition of your probation.
Talk to a Lawyer
It's important to receive qualified legal advice if you are ever facing any type of criminal charge or investigation. Real estate licensing requirements and laws that prohibit engaging in the practice of real estate without such a license differ significantly from state to state. Only an attorney in your area can provide you with legal advice relevant to your situation that takes into account not only the appropriate laws, but also the attorney's experience with area prosecutors, police, and courts. You should never speak to investigators or make a decision about your case until you have consulted with an experienced criminal lawyer near you.
Justia US Law US Codes and Statutes Georgia Code 2010 Georgia Code TITLE 43 - PROFESSIONS AND BUSINESSES CHAPTER 40 - REAL ESTATE BROKERS AND SALESPERSONS § 43-40-29 - Exceptions to operation of chapter
O.C.G.A. 43-40-29 (2010) 43-40-29. Exceptions to operation of chapter (a) Except as otherwise provided, this chapter shall not apply to: (1) Any person who, as owner, as the spouse of an owner, as general partner of a limited partnership, as lessor, or as prospective purchaser or their regular employees, performs any act with reference to property owned, leased, or to be acquired by such owner, limited partnership, lessor, or prospective purchaser where such acts are performed in the regular course of, or as incident to, the management of such property and the investment therein or any person who manages residential apartment complexes under a contract approved by any federal agency for an organization which is exempt from federal taxes pursuant to Section 501(c)(3) of the Internal Revenue Code, as defined in Code Section 48-1-2, provided that such person was engaged in managing such property under such type contract prior to January 1, 1989; (2) An attorney in fact under a duly executed power of attorney to convey real estate from the owner or lessor; (3) A licensed practicing attorney acting solely as an incident to the practice of law; (4) Any person acting as receiver, trustee in bankruptcy, administrator, executor, or guardian or acting under a court order or under the authority of a will or of a trust instrument; (5) Any officer or employee of a government agency in the conduct of official duties; (6) Any person employed by a public or private utility who performs any act with reference to property owned, leased, or to be acquired by the utility employing that person, where such acts are performed in the regular course of, or as incident to, the management of such property and the investment therein; (7) Any person who, as owner or through another person engaged by such owner on a full-time basis or as owner of a management company whose principals hold a controlling ownership of such property, provides property management services or community association management services, buys, sells, leases, manages, auctions, or otherwise deals with property owned by such person; (8) Any person employed on a full-time basis by the owner of property for the purpose of providing property management services or community association management services, selling, buying, leasing, managing, auctioning, or otherwise dealing with such property; (8.1) Any person employed on a full-time basis by a community association for the purpose of providing community association management services; (9) Any person acting as a referral agent who is not involved in the actual negotiations, execution of documents, collection of rent, management of property, or other related activity which involves more than the mere referral of one person to another and who: (A) Does not receive a fee for such referral from the party being referred; (B) Does not charge an advance fee; and (C) Does not act as a referral agent in more than three transactions per year; (10) Any individual employed by a broker to assist in property management services on property on which the broker has a written management agreement that the broker procured from and negotiated with the owner, provided that such individual's activities are explicitly authorized by the broker in a written agreement between the broker and the employee and provided that such activities are limited to one or more of the following: (A) Delivering a lease application, a lease, or any amendment thereto to any person; (B) Receiving a lease application, a lease, or any amendment thereto, a security deposit, rental payment, or any related payment for delivery to and made payable to the broker or the owner; (C) Showing a rental unit to any person, provided that the employee is acting under the direct instructions of the broker, and executing leases or rental agreements; (D) Providing information authorized by the broker about a rental unit, a lease application, or a lease; (E) Providing information to a tenant about the status of such tenant's security deposit or rent payments or to an owner about the owner's financial accounts and payments from the owner's tenants; and (F) Performing any ministerial acts that are explicitly authorized by the broker in a written agreement between the broker and the employee.Any broker utilizing the services of such an employee shall be held responsible under this chapter for the activities of that individual; (11) Any person who provides property management services on properties available for less than 90 days' occupancy by guests or occupants and meets all of the following conditions: (A) The property manager enters into a written agreement with the owner specifying all terms and conditions under which the property is to be managed, the reporting of income and expenses, and the remitting of income to the owner; (B) The management agreement between the property manager and the owner does not allow the property manager to rent or lease the property and any agreement between the property manager and the guest or occupant is not a lease or rental agreement; (C) Any applicable zoning laws do not prohibit short-term occupancy uses of the property; (D) The guest's or occupant's occupancy is for less than 90 days; (E) No deposit exceeds the cost of the rental required for the minimum rental period; (F) The guest or occupant pays any required state or local sales taxes or excise taxes on rooms, lodgings, and accommodations and the property manager has any required state or local business licenses or permits; (G) The property manager has the authority to specify rooms or units that the guest or occupant will occupy; (H) No extra charge is made for basic utilities; (I) Notice is not required for a guest or occupant to terminate occupancy of the room or unit, except as provided under the provisions of Article 1 of Chapter 21 of this title; and (J) The room or unit is not the permanent residence of the guest or occupant; (12) Any person who is a member of a community association and who provides community association management services only to one community association of which such person is a member; (13) Any person who performs only physical maintenance on a property; or (14) A licensed certified public accountant acting solely as an incident to the practice of public accounting.(b) The exceptions provided by subsection (a) of this Code section shall not apply to any person, other than an owner or individuals who are full-time employees of the owner, who performs the acts of a broker on property required to be registered under Article 1, 2, or 5 of Chapter 3 of Title 44.(c) The exceptions provided by subsection (a) of this Code section shall not apply to any person who holds a real estate license.
(d) The exceptions in subsection (a) of this Code section are not applicable to a person who uses or attempts to use them for the purpose of evading licensure required by this chapter.
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