Illinois REALTOR® Magazine | October 2013

Licensed Personal Assistants:

To Be or Not to Be?

Questions and answers to help you make the best business decision whether to hire a licensed or unlicensed assistant.

By Elizabeth A. Urbance  |  IAR Legal Hotline Attorney; Associate, Sorling Northrup Attorneys

Hopefully there has been more positive activity in your real estate market after going through some difficult times. As a result, you are getting busier and you might be starting to wonder if you could use some help in your real estate brokerage business. You might want to consider hiring a personal assistant (PA). However, all PAs are not the same. Some have real estate licenses and would be called licensed personal assistants (LPAs); while others don’t have a real estate license and are thus, unlicensed personal assistants (UPA). So, how should you decide which will be more helpful to you in your business?  Let’s take a look at some questions and answers that might help you make these business decisions.

What’s the difference between an LPA and a UPA?

As the name/acronym implies, the LPA has a real estate license and the UPA does not. The LPA, by virtue of being licensed under the Illinois Real Estate License Act (the Act), must comply with its provisions just like any other real estate licensee. There is no category of licensure for an LPA so the LPA could hold a leasing agent’s license, a broker’s license or a managing broker’s license. An LPA who holds a leasing agent’s license could only engage in licensed activities dealing with residential leasing. Also, any LPA must only work for one sponsoring real estate brokerage company at any one time (Section 10-20(a) of the Act). The LPA can’t have her license sponsored by ABC Referral Co. then act as an LPA for XYZ Realty, Inc. The LPA must be sponsored by the same sponsoring brokerage company that sponsors the licensee(s) whom the LPA assists. 

On the other hand, a UPA is not limited in this regard because he does not have a real estate license. Keep in mind, though, that the UPA must not engage in “licensed activities.”

What do I need to do if I want to hire an LPA?

First, check with your managing broker to be sure the sponsoring brokerage company is in agreement with this decision. The LPA will need to be sponsored by your sponsoring brokerage company and will also need to have a written independent contractor or employment contract with the sponsoring brokerage company just like you do. The terms of the agreement might differ but the Act requires that there be an agreement  in place between each sponsored licensee and his sponsoring brokerage company. Items to consider will be whether the LPA will be categorized as a statutory non-employee (which results in treatment similar to that of an independent contractor) or an employee of the sponsoring brokerage company. The categorization will depend upon the LPA’s role.  For example, will the LPA be a “buyer’s agent” on a “team” or will she be engaged in more clerical tasks where the assisted licensee exercises control and direction over the LPA’s activities?  The former suggests statutory non-employee (independent contractor-like) status. (The statutory non-employee needs a written agreement, a license and a substantial portion of her income derived from commissions (90 percent)).  In this case, the LPA will be responsible for her own taxes and benefits; much like other sponsored licensees. 

However, the LPA working under the assisted licensee’s supervision and direction following the assisted licensee’s “orders,” or being paid partially or entirely by the hour or by salary is more likely an employee.  The sponsoring brokerage company will be required to take withholdings out of her paycheck. The LPA who is an employee may also be entitled to benefits that other company employees receive. In either case, it is important to get professional legal and financial advice.

Will a UPA always be an employee?

As a general rule, yes. The UPA, by the nature of the job and the requirement for oversight, direction and supervision, will be an employee. The UPA is not subject to the provisions of the Act so the assisted licensee should determine after consultation with his managing broker who will hire the UPA, the sponsoring broker or the assisted licensee. 

Whoever does hire the UPA will need to make the legal withholdings and depending upon the facts, may or may not have to provide company benefits. An important question will be whether the UPA is an employee of the assisted licensee only or is he an employee of the sponsoring brokerage company? The answer to this question could well make a difference as to whether benefits must be provided to the UPA. As you can see, professional legal and financial advice will be helpful here too.

Who pays the LPA?

The sponsoring brokerage company must pay the LPA for licensed activities.

Who pays the UPA?

The entity or person who hires the UPA should pay him. The sponsoring brokerage company should be sure the UPA is being paid appropriately with proper withholdings even if the assisted licensee is paying the UPA. 

  • For more in-depth discussion on personal assistants:

Personal Assistant Manual Teams and the Illinois Real Estate Brokerage Firm Illinois Real Estate License Act Administrative Rules (see p. 119 for Section 1450.740)

Download FREE for members at www.illinoisrealtor.org/downloads

Breakout Text: 

October 2013

October 2013 cover


Isn't it Time You Cloned Yourself?
How to get to the next level in real estate by hiring your first assistant.


Personal Assistant Manual Cover

See the Personal Assistant Manual for more discussion on employment status. This manual is your key to working with licensed and unlicensed real estate personal assistants. It contains sample contracts, proposed rules, benefits and Q&A. Revised 2011.

Purchase a hard copy (Item #521, $1.50) from the IAR REALTOR® Store, 800-529-2696 or download and electronic format FREE for members.


Permitted activities for UPAs:

Is it permissible for a UPA to host a public open house?
No. Holding real estate out to the public for potential sale or lease is a licensed activity requiring a real estate license.

Is it permissible for a UPA to do “cold calling” on behalf of the assisted licensee?
No. While the Rules under the Act (Section 1450.740) allow the UPA to set appointments for the assisted licensee, the rule specifically excludes solicitation of real estate brokerage business. (Section 1450.740(b) (18)).

Where can I find more do’s and don’ts for UPAs?
There is a helpful list in Rules Section 1450.740 under the Illinois Real Estate License Act.

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