Without seller's authorization, listing agent hired unlicensed contractors, allowed them into the home, and sent the seller an invoice afterward.

Asked by Kevin G., Los Angeles, CA Mon Aug 6, 2012

A seller of a residential property signed a listing agreement with a California-licensed real estate salesperson. The home needed some updating, and the agent offered to coordinate that for the seller. The seller requested that the agent provide them with bids so that they could decide what work to do or not to stay within their budget. Instead, without the seller's authorization, the agent hired unlicensed contractors and allowed them into the home to begin work. After the fact, the agent sent the seller invoices for the work (work which had NEVER been authorized by the seller). Some of that work was completed (poorly), and some was not. The seller requested immediate cancellation of the listing agreement, but the agent and the agent's broker refused. What specific Real Estate laws/ethics codes were violated? How would one best go about handling this situation and reporting it to the California Department of Real Estate?

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Ron Escobar - Local Expert’s answer
Ron Escobar -…, Agent, Beverly Hills, CA
Mon Aug 6, 2012
I am sorry to hear about your frustration. I am a licensed broker and licensed contractor, so I can relate to the issues you described. I have also been to a few bar-b-ques so I know thee is always two sides to every story...

I can tell you that the CA Department of Real Estate http://www.dre.ca.gov is there to protect consumers, and also that the California State Licensing Board http://www.cslb.ca.gov is there to regulate unlicensed and licensed contractor activities.

All that said, as in every conflict the best way to resolve it is through dialog and compromise and good faith. I find it hard to believe that someone would just start repairs on a house without having a legitimate good intention... Additionally whether you pursue legal or regulatory redress of your issues with the courts or governmental entities, you are looking at a very long time and lots of energy. Be ware of trigger happy attorneys that speak incendiary language just to collect attorneys fees...
Good dialog, calm attitude and honest good faith is always a better path to compromise.

Best of luck, and if you find my answer helpful, please give it a "Thumbs Up"

Ron Escobar, MBA
Broker & General Contractor
1 vote
Dorene Slavi…, Agent, Torrance, CA
Sat Aug 11, 2012
Dear Kevin,

It doesn't sound good all the way around.
I am wondering how long the listing contract was made for? Normally it's 4- months (or so), in which case you could just wait until it expires.
In my experience it is quite unusual for a broker to refuse to cancell a contract when the seller insists upon it. After all, we do need your cooperation in order to market a property and it serves no purpose to be at odds with your client.
You can certainly complain to the D.R.E. (department of Real Estate), but in my professional opinion it has gone "legal" and a few hours with a good attorney should give you the answers you need.
0 votes
Kathleen Bec…, Agent, Santa Monica, CA
Sat Aug 11, 2012
I agree with Harold...glad I didn't go to this party too! He states the two places that you can file a complaint. Contact a real estate attorney for advice on this one. Your in a bit of a pickle...I hope that the unauthorized contractors don't file a mechanics lien on your house for the outstanding bills.

Can you prove that you did not authorize the work? Who let the workers into the house to do the work?

Good luck!

All the best,
0 votes
Richard Czar…, Agent, Los Angeles, CA
Tue Aug 7, 2012
I think you have a legal problem and none of the real estate brokers is really authorized to address it properly. It can amount to an unlicensed practice of law and none of us should do that. I suggest you obtain an advise of an attorney that practices in areas of construction law. He or she should be able to solve all of your problems and give you a workable solution.
0 votes
carlos parra…, Other Pro, Monrovia, CA
Tue Aug 7, 2012
Unfortunately you are between a rock and a hard place. You have two problems here.
The first is your need to sell your home. If any of the contractors who did work in your home is licensed, then they have a right to file a Mechanics Lien on your property if they are not paid. If Liens are filed on your home, it will be difficult to sell without settling these debts. From the invoices you can easily find out which contractors were licensed and which were not. Then negotiate with the licensed ones a settlement (but make sure they finish the work to your satisfaction first). Tell the other ones you will turn them in to the California State Contractors Board(http://www.cslb.ca.gov) if they persist. Then get the house back in order using qualified contractors and put your house back on the market with a legitimate agent.
The second problem is with your agent and broker. Yes, you can report this to the California Department of Real estate (http://www.dre.ca.gov), but you will get no satisfaction there. The Agent violated your trust and took action without authorization, which should have been in writing. You will have to get an attorney and file a suit.
0 votes
Annette Law…, Agent, Palm Harbor, FL
Tue Aug 7, 2012
Read carefully what Ron Escobar has shared. A penny's worth of wisdom can save you a lifetime of grief.
What is the outcome you are seeking in the sale of your home?
Is this a step in that direction?
Are you responding to inflamed emotion (pride) or because your 'goal/outcome' has been placed in jeopardy? Measure carefully the consequences of your action. IN the end there will be only one winner. The winner will not be you, the agent or the broker. All the vitriol regarding ethics and breach of protocol can so inflame the senses of injustice to compel one to take the path most illogical.
Recently a transaction of which I had knowledge was involved in 'unauthorized' repairs. The lien that followed prevented the sale for YEARS! Hmmmm, it's still for sale and can not be sold except to a buyer who likes wading into someone else's battle.
Indeed, you may need to consult an attorney, the outcome , however, is rarely what either party expected. See if you can't work this out beneficially to achieve your goal.

Best of success to you,
Annette Lawrence, Broker/Associate
Remax Realtec Group
Chat real estate on: http://www.RealEstateMadeEZ.us
0 votes
Laura Coffey, Agent, Santa Clarita, CA
Tue Aug 7, 2012
You need to seek legal council right away.
0 votes
The Medford…, Agent, Fremont, CA
Tue Aug 7, 2012
As a licensed general contractor, I advise you to take this issue to the State Contractor’s licensing board. If indeed work was begun on a property by unlicensed individuals WITHOUT the seller’s consent, then, in my opinion, the realtor in question violated California Contract law and is culpable for the expenses involved. Unlicensed workers cannot charge in excess of $500 in California and, if the work exceeds that amount, they do not have access to the contract laws to enforce payment.

If the Realtor indeed allowed unlicensed workers to access the property without the consent of the seller, then they have, in my opinion, breached their fiduciary responsibility to the seller and are in breach of the listing contract. This should be ample cause to cancel the contract.

If the facts can be verified as you have stated, and the realtor acted on your behalf without your consent and in so doing violated the law, then the realtor in question not only needs to cancel the listing agreement, they should, at their expense, return the property to its prior condition.

If the realtor and broker do not cooperate willingly, then there may be a need to get a real estate attorney involved.
0 votes
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