Can agents receive payment for the oversight of construction work?

QUESTION:  One of my agents has asked if she is allowed to receive payment from a property owner to oversee some renovations and repairs. The sellers live a long distance away and want to make some improvements to their home before putting the home on the market. Is my agent is allowed to receive payment for overseeing the work that is being planned? If so, would it be best to have an agreement between the agent and the homeowners that is separate from the listing agreement?

ANSWER:  There is no rule or law that prevents licensed real estate agents from entering into agreements to provide services that do not fall within the definition of real estate brokerage. Unless your firm wishes to take responsibility for the performance of such services, we suggest that any agreement to provide non-brokerage services be handled separate and apart from your firm’s listing agreement.

Any agent wishing to provide non-brokerage services should keep in mind a different type of license may be required in order to legally provide certain services. For example, depending on the scope of the construction/repair work that is planned, your agent may need to obtain a general contractor’s license if she wants to be compensated for overseeing that work. Chapter 87 of the North Carolina General Statutes regulates contractors. Section 1(a) of that Chapter defines the term “general contractor”. The definition includes any person who, for a fixed price, commission or fee, undertakes to “superintend or manage” the construction of any building, improvement or structure, where the cost of the undertaking is thirty thousand dollars ($30,000) or more. It is unlawful to practice general contracting in North Carolina without a license.

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Filed Under: Fees/Commissions,