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Current Offer 5
Freeman's Refer & Benefit Program
*O ne of the most common questions asked of the Department by licensees concerns the payment of referral fees to both licensees and unlicensed persons. There appears to be considerable confusion and misinformation regarding when these fees can and cannot be given or received, therefore, this article will attempt to shed some light on the subject.
One question that is often asked is if a broker can pay a referral fee to an unlicensed person. The answer is yes if that person has not performed any licensed acts in connection with the transaction for which the fee is being paid.
Click Here to Read the Whole DRE Newsletter *Pages 3-4
For More Information on How You Can Make a Sizeable Referral Fee
Call 888.500.8289 Ext. 1007
Referral fees also known as: compensation, consideration, anything of value, or form of payment.
Caution — don’t cross the line between unlicensed and licensed activity
In other words, don't solicit anything at all. If you are aware of someone that is in need of Commercial Real Estate Sale, Buy, or Commercial Real Estate Leasing services...
....Simply tell us about it and we'll do all of the work. If we are successful with the referral we will pay you a Legal Referral Fee.
In 1995, the California Attorney General issued an opinion (78OPS CAL ATTY GEN 71) that stated a real estate broker can pay a commission to an unlicensed person for providing the name, telephone number and address of a prospective borrower provided that the unlicensed person did not obtain the information in the course of soliciting borrowers or lenders on behalf of another or others.
The opinion also stated that the finder’s exemption can only apply if the activity is limited to arranging an introduction between the parties and the unlicensed person cannot be involved in any role in the negotiation of the loan, no matter how slight. The same analysis is applicable to other licensed transactions, i.e., residential or commercial sales or leasing.
Brokers who wish to pay referral fees to unlicensed persons must take every precaution to prevent the finder from crossing the line into licensed activity. In general, brokers who compensate an unlicensed person who has taken any role in the loan negotiation or performed any licensed activity are subject to license discipline pursuant to B&P Code Section 10138. The person accepting the fee is guilty of a public offense punishable by a fine, imprisonment or both.
For more information on commercial real estate, commercial real estate leasing, sell or buy commercial real estate, or any other information regarding commercial real estate in San Bernardino and Riverside Counties, contact us at 888.500.8289 Ext. 3
Please fill out the following form and we will contact you as soon as possible! * is Required.
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