1099 Contract and commercial lease negotiations

L

Lyudmila

New Member
Jurisdiction
North Carolina
Are there any licenses or permits required for a person under a 1099 contract to be able lead negotiations of a commercial lease on behalf of the company? For example, are they required to have a realtor's license to do something like that or can they do it without one? They wouldn't be signing the lease, just negotiating.
 
Lyudmila said:
I am the Executive Assistant asking on behalf of the CEO of the company. He wants to know if the people we have under 1099 contract are allowed by law to negotiate leases on our behalf.
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Lyudmila said:
Are there any licenses or permits required for a person under a 1099 contract to be able lead negotiations of a commercial lease on behalf of the company?
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First, the series of IRS 1099 forms are just a tax forms used to report a wide variety of income paid to others, including but not limited to, payments to independent contractors. So there is no such thing as a "1099 contract". But there certainly are independent contractors with whom you may enter into contracts. Those people are not your employees; they are independent businesses no different from when you go to see a doctor, lawyer, or real estate broker. Because they are not your employees, if a license is needed to do this kind of work for others then the independent contractor will need that license to do the work for you. Just like I need a license to do legal work for others; hiring me as an independent contractor doesn't change that. So if they are doing work that in your state requires some kind of state license (e.g. real estate brokers/sales license, etc) those independent contractors will need that license.
 
This is what is considered the practice of law in NC.

§ 84-2.1. "Practice law" defined.

(a) The phrase "practice law" as used in this Chapter is defined to be performing any legal service for any other person, firm or corporation, with or without compensation, specifically including the preparation or aiding in the preparation of deeds, mortgages, wills, trust instruments, inventories, accounts or reports of guardians, trustees, administrators or executors, or preparing or aiding in the preparation of any petitions or orders in any probate or court proceeding; abstracting or passing upon titles, the preparation and filing of petitions for use in any court, including administrative tribunals and other judicial or quasi-judicial bodies, or assisting by advice, counsel, or otherwise in any legal work; and to advise or give opinion upon the legal rights of any person, firm or corporation:

Provided, that the above reference to particular acts which are specifically included within the definition of the phrase "practice law" shall not be construed to limit the foregoing general definition of the term, but shall be construed to include the foregoing particular acts, as well as all other acts within the general definition.

(b) The phrase "practice law" does not encompass:

  1. (1) The drafting or writing of memoranda of understanding or other mediation

    summaries by mediators at community mediation centers authorized by G.S.7A-38.5 or by mediators of employment-related matters for The University of North Carolina or a constituent institution, or for an agency, commission, or board of the State of North Carolina.

  2. (2) The selection or completion of a preprinted form by a real estate broker licensed under Chapter 93A of the General Statutes, when the broker is acting as an agent in a real estate transaction and in accordance with rules adopted by the North Carolina Real Estate Commission, or the selection or completion of a preprinted residential lease agreement by any person or Web site provider. Nothing in this subdivision or in G.S. 84-2.2 shall be construed to permit any person or Web site provider who is not licensed to practice law in accordance with this Chapter to prepare for any third person any contract or deed conveying any interest in real property, or to abstract or pass upon title to any real property, which is located in this State.

  3. (3) The completion of or assisting a consumer in the completion of various agreements, contracts, forms, and other documents related to the sale or lease of a motor vehicle as defined in G.S. 20-286(10), or of products or services ancillary or related to the sale or lease of a motor vehicle, by a motor vehicle dealer licensed under Article 12 of Chapter 20 of the General Statutes. (C.C.P., s. 424; 1870-1, c. 90; 1871-2, c. 120; 1880, c. 43; 1883, c. 406; Code, ss. 27, 28, 110; Rev., ss. 210, 3641; 1919, c. 205; C.S., s. 198; 1933, c. 15; 1941, c. 177; 1943, c. 543; 1945, c. 468; 1995, c. 431, s. 3; 1999-354, s. 2; 2004-154, s. 2; 2013-410, s. 32; 2016-60, s. 1.)
 
PayrollHRGuy said:
This is what is considered the practice of law in NC.
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It's not the practice of law that would be at issue in negotiating the leases. Rather, it's that NC law requires that, in general, those negotiating leases for others must be licensed as brokers. There is an exception allowing employees of the property owner to do that work, but that won't cover independent contractors. As the NC Real Estate Commission explains in continuing education materials:

Is a property owner permitted to hire an unlicensed individual or entity to assist with leasing and managing the owner's properties?

Answer: No. Only W-2 employees of a licensed broker who has been hired to
manage property for others will qualify for this exception. Unlicensed property owners
may NOT pay unlicensed persons who have no ownership interest in the property to
assist them in leasing or managing property they own, even if such persons are related to the property owner.​
 
flyingron said:
Of course, W2 Employees is about as silly a term as 1099 Contracts.
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Yes, in a strict sense, but using the phrase as a means of making sure the point is fully understood by the reader is appropriate.
 

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