All Forum Posts by: Jade Smith

Hi Bruce,

Thanks for your response. Nothing more to the story here. She found us via a real estate Facebook group. And no she is definitely not an apartment finder or associated with any company or brokerage. She operates under her own one-woman consulting company. We were so naive.

The regulations are very clear about how brokers can/cannot pay unlicensed finders, but what about tenants?

I’ll call the dept of real estate but am hoping someone may know the answer to this one sooner.

Quote from @Theresa Harris:

If you agreed to pay her one month's rent to find you a place and she did, then she held up her end of the contract.  By signing the contract, you agreed to pay her to find the place.  If you don't pay, she can always take you to court.  Who knows if it would hold up.

Thanks Teresa. She is being paid. What I’m trying to figure out is if her “service” is something that is not permitted by real estate board in the first place.

Can unlicensed property finders charge tenants in this way or is this licensed activity? Will keep digging.. 

Is it allowable for an unlicensed “property finder” (unconnected to any brokerage) to charge tenants large commissions to find them luxury homes to rent? 

Here’s the detail:

Last year, we were tenants looking for a very specific luxury property (we needed an owner that would permit us to sublease when we were away travelling). Impossible to find, and no luck through our broker.

We were approached by an unlicensed “property finder” (not connected to any brokerage) who convinced us to let her search for our home.

She found us a home that hit our specs (including a wonderful landlord allowing us to sublease) and charged us a finder’s fee of an entire month’s rent (18k). At the time, it was worth it. But we now know that many of these unlicensed finders are not following the rules.

Is it even allowable for an unlicensed “property finder” to charge tenants like this?

I know the rules for how licensed brokers can pay “unlicensed finders” is clear, but what about when tenants are the ones paying? 

We were under the impression she would just find the property for us and let us take it from there. But she inserted herself heavily in the negotiation, even after we asked her not to. We had no agreement with her that she could negotiate on our behalf. Isn’t this a licensed activity?

We learned later that she was asking for a commission on both sides, asking an additional 18k from the landlord’s broker! She had no interest in getting the rent down for us, and was playing both sides. Of course they didn’t pay her.

She made us sign an MOU where payment was contingent on the lease being signed. Doesn’t that go beyond what a finder can do, which is simply to connect two parties? 

We pay her in chunks over the course of the 3 year lease. If what she was doing was offside, I don’t want to be doing this.

Finally, please don’t judge - we know we were too naive at the time, and we would only ever work through licensed brokers now. She was a master convincer, saying her role and fee was completely permissible, and we trusted it.

Thanks Rick. And absolutely, I’m getting my license. Just want to know what we can do in the meantime. 

It’s a fine line but would love real clarity on whether it’s actually permissible. 

We are a small vacation rental company that manages short-term rentals for homeowners in Los Angeles. We manage ONLY transient occupancies - i.e short term stays under 30 days, for which no brokers license is required. (In California - to property manage rentals above 30 days, we would need to have a brokers license)

We have gotten some requests from guests for stays above 30 days (usually 2-3 months). Instead of denying them, can we refer them directly over to the owner for them to sign a lease with the owner who is willing to effectively manage the contract, payment and relationship BUT would still want to retain us (albeit for a lower fee) to deliver ONLY guest and property care activities (guest communications, organizing cleaning, lawn and pool care etc). 

Would this be permitted if we are unlicensed? Essentially it would be supporting the owner to manage their property, and steering clear of any activities that we see as being clearly licensed activities - negotiating, taking payments etc. 

Thanks in advance to anyone willing to help me think this one out!

Also, would love suggestions for how we could partner with a licensed broker to accommodate these MTR requests.  For example, could we partner with a licensed broker who could handle the negotiation and money and we handle all the things related to guest and property care? Would he/she need to “employ” us, so to speak? 

(For context, we are in the luxury market and the guests are very demanding - they want lots of communication, concierge etc.. and maintenance, lawn care, gardening etc is time consuming.. so there’s a big job beyond just brokering and managing managing funds)