The topic of serving alcohol often raises questions about liability. Surprisingly, perhaps, California law provides for only limited liability.
Every now and again someone will come up with the idea that a good way to promote a listing would be to have an open house and to serve alcohol at the event. This could be the agent’s idea or it might come from the seller. It could be a twilight open house or it might be Mimosas in the morning. Etc.
We don’t automatically reject such an idea, nor do we unhesitatingly endorse it. We do know that it is fraught with caveats and concerns. We also know that many of the issues will vary from state to state. California REALTORS® are fortunate that the legal department of the California Association of REALTORS® (CAR) has prepared a question-and-answer memo on the topic. It is instructive; and I shall draw upon it here, reminding readers that the laws of another state may be different.
First — and this applies in every state — an agent should seek the specific permission of his or her broker to conduct such an event. In fact, it is probably the case that every broker should have some written policy, which could be as minimal as saying “permission must be granted”. To have no policy and to leave it to agent discretion would not pass a broker-supervision test. Moreover, it just might be that the broker’s insurance (E&O or Professional Liability) might have something specific to say about such events.
Well, fine, let’s say it’s OK with the broker,as long as it’s all legal. What will that entail?
First of all, is any kind of license required? The answer to that is ‘no’, provided that certain conditions are met. They are: (1) There is no sale of alcohol. (2) The event is not open to the general public at the time alcoholic beverages are served or being consumed. (3) The premises are not generally maintained for the purpose of keeping, serving, consuming, or disposing of alcoholic beverages. (Alcoholic Beverage Control Act § 23399.1)
This is sometimes called the “private party” exception. To be considered a “private party” the host must have the names of the invited guests beforehand. If any person not on the list is admitted to the event, the event is considered “open to the public”, and the host must have the appropriate licenses for serving alcohol.
If the open house does not meet the “private party” exception — and most won’t, because they allow attendees whose names are not on a previously-determined guest list — then it will be necessary to have a licensed professional serving the alcohol. Both an On-Sale License and a Type 58 Catering Permit, issued by the Department of Alcohol Beverage Control are required. If additional professional servers are needed, “The servers should require identification from guests and should be able to properly identify how intoxicated guests are and to avoid serving alcohol to minors or intoxicated guests.”
Among other conservative precautions, the CAR memo advises: (1) Make sure no minors are present. (2) Impose a drink limit for guests. For example, each guest may be provided with two (2) tickets redeemable for an alcoholic beverage. (3) Include a variety of alternative, non-alcoholic beverages.
The topic of serving alcohol often raises questions about liability. Surprisingly, perhaps, California law provides for only limited liability. Business and Professions Code § 1714(c) says that:
Except as provided in subdivision (d), no social host who furnishes alcoholic beverages to any person may be held legally accountable for damages suffered by that person, or for injury to the person or property of, or death of, any third person, resulting from the consumption of those beverages.
The exception? Any adult “who knowingly furnishes alcoholic beverages at his or her residence to a person whom he or she knows, or should have known, to be under 21 years of age…”
So, you want to serve alcoholic beverages at an open house? Go ahead. Just be careful, very careful, to abide by all the rules. I’d drink to that.
Bob Hunt is a director of the California Association of Realtors®. He is the author of Real Estate the Ethical Way. His email address is This email address is being protected from spambots. You need JavaScript enabled to view it.
