California Real Estate Practice Exam

For purposes of the California Real Estate Law, a salesperson is considered?

1. An employee

2. A subagent

3. An independent contractor

4. A broker

The correct answer is: An employee

For the purposes of California Real Estate Law, a salesperson is classified as an independent contractor. This classification is significant because it affects the legal and financial responsibilities of the salesperson as well as the relationship with their employing broker. Independent contractors typically have more control over their work schedules, methods of operation, and practice, unlike employees who are generally subject to directives from their employer. Being an independent contractor means that the salesperson is often responsible for their own taxes, benefits, and may have the opportunity to work with multiple brokers or clients. This status is quite common in real estate transactions in California and aligns with how real estate salespersons are managed under California's regulations. The classification of salesperson as an employee would limit the autonomy usually afforded to salespersons in their practices. Therefore, recognizing the role of a salesperson as an independent contractor is crucial for understanding their rights and responsibilities in the real estate market.