Can a Realtor Pay An Unlicensed Person a Referral Fee?
November 13th, 2014
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Someone told me that I could pay an unlicensed person a referral fee as long as the fee did not exceed $50. Is this true?
ANSWER: Under the provisions of Section 1101.002(1)(A)(ix) and (x) of the Real Estate License Act a person making a referral of prospects or property for the sale or rental of real estate must be licensed under the act if the referral is done with the expectation of receiving valuable consideration.
In August 1999, TREC amended Section 535.20 of the TREC rules to provide that for purposes of that section, the term "valuable consideration" includes, but is not limited to: 1) money; 2) gifts of merchandise having a retail value greater than $50; 3) rent bonuses; and 4) discounts. If the referring party does not have a real estate license, then no referral fee could be paid to that party by the broker receiving the referral. Under the amended rule, a broker could give an unlicensed person a gift of merchandise having a value of no more than $50 and this would not subject the unlicensed recipient to a charge of unauthorized practice as a broker, nor result in a violation of TREC rules by the broker giving the nominal gift.
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Disclaimer : The views and opinions expressed in this blog are those of the author and do not necessarily reflect the official policy or position of the Houston Association of REALTORS®
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