James L. Goldsmith, Esq.

Last Updated: January 10, 2018 | View all posts by James L. Goldsmith, Esq.

A Pennsylvania licensed broker is required to maintain an office within the commonwealth unless he/she is a reciprocal broker with an office in another state.

As required by the rules and regulations of the Pennsylvania Real Estate Commission, a licensed office must be “devoted to the transaction of real estate business and be arranged to permit business to be conducted in privacy.” This does not mean that the entire building within which the office is located must be devoted to real estate. Real estate offices may be located within buildings that house other types of activities.

A broker may also maintain an office in a private residence, provided the entrance to the office is separate from the entrance to the residence. Whether the office is located in a multipurpose building, a stand-alone real estate office or a residence, it must undergo an inspection before a license is granted for its use. The inspector will not only assure that the office is arranged for business to be conducted in private or that the home office has a separate entrance, the inspector will also determine that the name of the brokerage, as designated on the license, is displayed outside of the office. For purposes of the inspection the sign must be present for the inspector’s examination. Once approved, the sign will have to be affixed.

Brokers may also operate out of multiple offices. Each additional office is referred to as a branch office and must also be licensed, following inspection. The licensees affiliated with a broker may operate out of one or all of the licensed offices. RELRA requires that agent licenses are to be permanently displayed in an office of the broker, but I am advised that current practice allows the broker to maintain licenses at the main office with copies maintained at each branch. Eventually, licenses will be made available online and not mailed, but in the interim, the originals might be kept at a main office with copies at the branches.

That licensees only work in the licensed offices is not required, nor is it practical. A listing may occur at the seller’s home. For the convenience of consumers and to accommodate property visits, meetings may take place at restaurants or other facilities, but the consumer must have a choice in meeting outside of the office. The notion is that the out-of-office meeting is to accommodate the consumer and not you, the licensee. No consumer should ever be uncomfortable with a meeting site and every meeting should permit private discussion.

Likewise, research, drafting brochures or MLS input sheets can take place outside of the office without violating the law. No, you won’t go to jail because you sat in your pjs and worked at home!

Lately, I have been fielding questions from salespeople, and sometimes teams of salespeople, who have access to a business office that would be conducive for use as a real estate worksite. If you can work out of your hotel room while on vacation, why couldn’t you work out of some other, unofficial office?  You probably can if you observe several “rules.”

First, if it is not licensed, it is not your office! Don’t call it your office. Don’t even refer to that place at home where you work in your pjs as your “home office.” You occasionally “work at home,” not in a “home office.”  The term “office” is reserved for the main or branch office that is licensed. No reference should be made on any business card, brochure, advertisement or any document that refers to an “office” unless it is one of your licensed offices. In addition to including the telephone number of your licensed office (the number one would be given if asking directory assistance), you may add your home phone and cell number.

Second, get permission from your broker. Brokers, feel free to make this rule No. 1. If your broker has a policy about where you meet clients, where you may take and store files or anything of a similar nature, observe it.

Brokers, who are obligated to supervise the licensed activities of all affiliated licensees, can’t possibly exercise their responsibility when the agents are scattered to the winds. Because brokers have this responsibility, they, or their managers, needs to have the access to their agents that an office provides.  Offices are equipped with file storage that gives the supervising broker greater access and control.

Third, while it is not illegal to remove a file from a licensed office, maintaining all of your files in a remote location where you devote time to licensed activity gives far greater risk to having your facility considered an unlicensed office, subjecting you and your broker to penalties. Don’t do it. Keep files in your licensed office. The same goes for those resources, equipment, inventory and other items typically used to facilitate your business.

If you seek to work out of a place where you would like to meet consumers, maintain files and have a community presence, get the place licensed! For teams who have their own “private” and seemingly invisible office, how do you know the shoe won’t drop? What happens if damage to the facility causes the loss of files or records not stored in the official office? What if someone in the know reports the unofficial “office” to the commonwealth? If it is important enough to add an alternative facility, it’s important enough to have it licensed.

Fourth, and from the department of redundancy I offer you this: observe your broker’s policies and rules. When in doubt, seek your broker’s permission.