Pennsylvania Real Estate Broker Files Lawsuit Challenging Pennsylvania Law Requiring Brokers to Have Brick-and-Mortar Offices
Requirement has cost broker tens of thousands of dollars per year for an office he does not use
HARRISBURG, Pa.—Today, a Lemoyne real estate broker filed a lawsuit challenging a law that requires all Pennsylvania real estate brokers to have a physical office in the commonwealth. Kevin Gaughen, represented by the Institute for Justice (IJ), argues the law violates the Pennsylvania Constitution’s right to earn an honest living.
“Having a physical office makes no sense for me, because I do all of my work over the phone, on-site at listings, or on the computer,” said Kevin. “This regulation costs me tens of thousands of dollars on a property I have absolutely no use for and takes a home away from someone, because I would rent it out if I wasn’t required to use it as an office.”
Kevin estimates that maintaining the physical office costs him $35,000 per year. In the years he’s had the office, inspectors have come to the property more times than clients have.
Since the 1920s, Pennsylvania real estate brokers have been required to maintain a brick-and-mortar location where they must display their real estate broker license. No work is required to be conducted in the office, but the Pennsylvania Real Estate Commission conducts inspections of the building to make sure it has a conference table, a filing cabinet and the broker’s license.
“The government cannot force you to buy or lease a ghost office you have no real use for,” said IJ Attorney Christian Lansinger. “This is an outdated regulation that serves no legitimate purpose, and drives up costs for both brokers and their clients. The Pennsylvania Constitution protects all Pennsylvanians from such irrational regulations.”
In 2022, IJ won a lawsuit on behalf of an Airbnb host in the Poconos, challenging a requirement that she obtain a real estate broker license in order to maintain rental properties. To obtain a real estate broker license, vacation property managers would have needed to complete a three-year apprenticeship under a licensed broker, complete courses and tests that have nothing to do with short-term rentals, and maintain a physical office in Pennsylvania. The court ruled that the licensing requirement as applied to vacation property managers was “unreasonable, unduly oppressive, and patently beyond the necessities of the case.” Here, Kevin, a traditional real estate broker, is arguing the office requirement makes no sense for him, too.
