Home > Unlicensed "Brokers" > “Unlicensed Brokers” – Who Is One And Why Discuss This Subject

“Unlicensed Brokers” – Who Is One And Why Discuss This Subject

In the real estate market, a broker is a person who acts as an intermediary between two or more parties in negotiating a real estate transaction.  This is a simple definition and it should be looked upon as such.  If the transaction involves real estate property and the person is an “intermediary” among the parties, then he or she must ne a licensed broker under Puerto Rico law.

We have created this category dealing with “unlicensed brokers” in attention to an increasing number of individuals who are acting as “intermediaries” on the Island of Vieques, notwithstanding that they are not in compliance with applicable licensing requirements as “brokers” under Puerto Rico Law.   Though our introduction will be brief, we hope that as the discussion evolves we will be able to communicate more details on what we understand is a very important subject.

In Puerto Rico, there is a particular law which regulates the real estate practice as far as real estate brokers are concerned.   Before someone can become a “real estate broker” under this law, the person has to attend an intensive preparatory course and submit himself to an examination by a board of realtors.  If the person becomes licensed, he or she must subsequently comply with additional licensing requirements and has to attend continuing education in order to secure his/her license for years to come.

Another aspect of becoming and remaining a broker which benefits the parties, is that brokers are subject to regulation by the Department of Consumer Affairs, known by its Spanish acronym of DACO.  This administrative agency is very aggressive and protective of consumer rights, which increases the need brokers have of assuring that every real estate transaction is performed in full compliance with applicable law.  When the parties to a real estate deal use a broker as defined herein, they are availing themselves with the protection afforded by applicable law.

By the way, using the term “unlicensed broker” in reference to individuals who act as brokers but are not licensed under applicable law, is kind of an oxymoron.  If the person is not licensed as a broker, then he/she is not a broker.  It is as simple as that.  Bear in mind that in this blog we will not dignify someone with the title of “broker” if that someone has not complied with all legal requirements accordingly.  For lack of a better term, we are just going to refer to such an individual as an “impostor.”

Unfortunately to many unwary parties, the consequences of dealing with an impostor are not well known and could be very harmful.  As noted before, a broker undergoes intensive and extensive preparation prior to becoming licensed, and will subsequently have to continue undergoing training to preserve his/her license.  An impostor has not undergone this training and is not subject to regulation by anyone other than himself.  When dealing with a broker, the parties avail themselves of this knowledge and experience which is otherwise not available when dealing with an impostor.

Another huge advantage for consumers is that legitimate brokers answer to the client, to the Board of Realtors and to DACO–which means that the client has DACO to help him/her exercise his or her rights accordingly.  The Puerto Rico Courts will always have jurisdiction over any matter, but the law which regulates brokers is more beneficial regardless of the forum chosen by the individual who feels prejudiced.

At this point, we open the forum for comments and questions on this subject.  As the discussion evolved, we will continue to add more information as needed, but always within the limits of the LEGAL DISCLAIMER presented in the “about” page of this blog.

Very truly yours,

Lampón & Associates

Categories: Unlicensed "Brokers"
  1. Jack Smith
    July 16, 2007 at 3:41 pm

    In regard to licensed brokers, is there a list of them for Vieques and Culebra and are “brokers” companies or individuals or both?

  2. Kimberly
    July 17, 2007 at 7:39 pm

    Is there a list of licensed brokers for Vieques?

  3. July 17, 2007 at 10:22 pm

    Dear Jack and Kim:

    We are obtaining the name and number of the office or individual to call and will post it on this page. We hope to get this done by tomorrow (Wednesday).

    Best regards,

    Santiago F. Lampón

  4. July 20, 2007 at 1:45 pm

    Where can I read theabout rights of consumers regarding real estate brokers? Can you tell me if there is a limit on the commission charged? Are “net” commissions allowed (broker gets all the profit after an agreed amount)? Does the broker have an obligation to advise the seller about what is a easonable selling price even if the seller wants to put a price much higher than the market price?

    I also have an issue with real estate ads which say that the property is “perfect for a second home”, “perfect for a rental property”. Why don’t we see any ads by the Vieques realtors saying the property would be perfect for a primary residence by a family? I find that this type of marketing is discouraging families looking for a place to live from inquiring. I would like to see ads which say: “Perfect for a young family’s first home. Call us and we will help you find financing.”

    Which brings me to the role of the banks in this hot real estate market. The Community Investment Act applies in Puerto Rico. Local banks should be making loans to residents of Vieques in equal proportion to the deposits made by residents. I urge the banks to publish their CRA Act reports openly in Vieques.

  5. July 21, 2007 at 2:17 pm

    Dear Kathy:

    Law number 10 and the ensuing regulation is the best read you can have at this time…other than calling DACO to learn about their informative publications directed at consumers.

    Realtors are highly regulated and, as in any profession, I understand that there are “rotten apples” anywhere you go. As a comparison, just look at what is happening within the medical profession. Nonetheless, I believe you have to start with the individuals working outside the law which is the subject of this category.

    Individuals acting as real estate brokers without being licensed are a great danger to consumers.

    For example, these individuals do not have to obtain and maintain a bond like licensed brokers do. This bond is a tool created to protect consumers when dealing with a broker who makes a mistake or breaches the law.

    There is no such bond to protect consumers from unscrupulous impostors.

    Impostors are also incurring in a criminal activity which can result in jail time and a fine…besides the civil responsibility to the affected party.

    Best regards,

    Santiago F. Lampón


    Estimada Kathy:

    La Ley número 10 y su reglamento es la mejor lectura que puedes tener sobre el tema….además de llamar a DACO para que te enteres de las publicaciones que ellos preparan con el consumidor en mente.

    La profesión de corredor de bienes raíces está altamente regulada. Comprendo que toda profesión tiene su manzana podrida. Actualmente, solamente tenemos que mirar lo que está pasando con la profesión médica para tener un punto de comparación. Sin embargo, estimo que debemos comenzar con las personas que están trabajando en este campo de manera ilegal, que es el tema de esta categoría.

    Los que actúan como corredores de bienes raíces sin estar licenciados, significan o representan un gran peligro para el consumidor.

    Por ejemplo, estos individuos no tienen que obtener ni mantener una fianza como lo tienen que hacer los corredores licenciados. Esta fianza es creada para proteger al consumidor cuando están en negocios con un corredor que comete un error o incumple con la ley de alguna manera.

    Esa fianza y esa protección no existen para las personas que actúan como corredores sin tener la correspondiente licencia existida por ley.

    Los impostores también están incurriendo en una actividad criminal que puede resultar en prisión y en una multa…además de la responsabilidad civil que tienen con las partes afectadas.

    Muchos saludos,

    Santiago F. Lampón

  6. David
    July 21, 2007 at 11:43 pm

    Santiago, Thanks for this great and thoughtful blog. Can you or someone list the licensed brokers available on Vieques?


  7. July 22, 2007 at 9:56 pm

    Dear David:

    Thanks for your comment David!

    We have tried to get such a list from DACO, but they have been unable to pinpoint the same. I also search their website on the internet, but to no avail.

    Meanwhile, you may contact DACO directly to verify if any given individal is licensed. You may also contact the Board of Realtors.

    Best regards,

    Santiago R. Lampón


    Estimado David:

    Gracias por tus comentarios y por tu mensaje.

    Hemos intentado conseguir esa lista por partede DACO, pero no nos la han podido facilitar. También intentamos en el internet, pero no tuvimos suerte. Continuaremos intentando.

    Entre tanto, si tienes alguna persona en particular que te interesa verificar. sugiero que llames directamente a DACO o al
    “Board of Realtors.”


    Santiago F. Lampón

  8. July 25, 2007 at 2:45 pm

    Licenced brokers and sales agents MUST by law include there licence number on any advertising, announcement, business card, sign etc. We all have a wallet size plastic version and also a 8 1/2 X 11″ version that must displayed on our office wall. If they don’t have it, display it or include it on there advertising, they don’t have a licence. BTW mine is 11424.

  9. July 30, 2007 at 11:02 pm

    Dear Helen:

    Thank you for your post. Everyone should ask for this number and learn as much as possible of the person they pretend to be in business with.

    Best regards,

    Santiago F. Lampón

  10. August 17, 2007 at 8:56 am

    I think there is a misunderstanding about “unlicenced Brokers” in Vieques. The problem is not the Real Estate companies on island, it is the bartender or the hotel receptionist, the building contractor, or the website offering “For Sale By Owner” for a small fee”or the person who you talk to on the street, when someone brings up the topic of Real Estate. The conversation usually starts with broad accusations against licenced brokers and then an offer to show you a property a friend has for sale. Those are the unscrupulous sales people who are breaking the law, charging huge commissions (as much as 30%) and sometimes selling the same property (untitled ) several times.

  11. Dave
    August 17, 2007 at 4:09 pm

    Santiago, thank you for replying to my question asking for a list of “real brokers” you mention DACO can you give the website. Also you mention Board of Realtors can you give me contact information.

  12. ERROL
    December 10, 2007 at 7:26 pm

    Mr. Santiago,
    This is a little off topic yet still relevant. I am intrested in a titled piece of land in Vieques. I will being going through the purchase process with a legitimate realtor. Once the land in purchased we will be visiting Vieques once a year or so. During our absence can the land be squatted upon and claim be made to title? Ive heard that structure should be built on the land immediatly to show ownership, is this only relevant to untitled land? Lastly, besides title, what is the greatest benifit of titled land i.e does it safeguard against issues brought up by Ms Davis? Thank you for your time. Ive really found all your blogs extremey informative.

  13. December 14, 2007 at 8:21 pm

    Dear ERROL:

    I have tried to contact you to respond to your request, but I am out of luck. Please write to blogmaster@lamponlaw.cm and send your contact information.

    Happy Holidays,

    Santiago F. Lampón

  14. Linda
    April 28, 2008 at 11:51 pm

    Dear Senor Lampon,

    Would you kindly explain the difference between “titled” and “untitled” property in Vieques? I see these terms on various real estate sites but I am puzzled about their meaning. The December 10, 2007, post makes me all the more curious.


  15. liz
    February 24, 2011 at 10:55 am

    About unlicensed brokers, do you have opinion how to tackle the folowing persistent problem?


    • March 7, 2011 at 5:49 pm

      There are two ways to handle this, and both require a disposition to have it stopped once and for all.

      On the brokers’ side of the equation, finding the evidence, the witnesses, the documents which establish the ilegal operation and presenting it to the District Attorney for prosecution. Some time ago I met with the DA and he assured me his willingness to do so with the proper evidence at hand.

      On the sellers’ and buyers’ side of the equation absolutely refusing to do business through and ilegal broker.

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