Thursday, September 15, 2011

Why do I have to tell you what they paid me?

Question:   We have a client who has a rental property and has offered our REALTOR® a referral fee if we send renters their way.

Is this allowed?

If a REALTOR® is not licensed to provide property management services and, as above, refer a tenant to a client – the referral fee (if received) must still be paid through the Brokerage as Property Management activity is included in the ‘trading services’ definition.

Licensed REALTORS® and Property Managers are under the obligation to report any and all remuneration (referrals, finder’s fees, commissions, expense reimbursements, bonuses) that is earned as a result of ANY ‘trading services’ activity, to their Brokerage.  Funds must be remitted to the Brokerage from the client and then paid out to the REALTOR® through the Brokerages Commission Trust account.  If a licensee accepts any remuneration directly from a client (Buyer, Seller, Landlord) they are in breach of their agent agreement to the client and the rules of their licence and Brokerage. Under the definition of Trading Services in section 1 of the Real Estate Services Act, “finding real estate for a party to acquire or finding a party to acquire real estate”, includes tenants and/or leases and as such licensees with a trading service license can provide this service however; they could not provide any of the other services defined under Rental Property Management Services in section 1 of the Real Estate Services Act they risk a suspension, fine, both or loss of their license issued by the Real Estate Council of British Columbia.

Something an innocent as a REALTOR® pocketing money a client reimbursed them for some special advertising they requested can cause the REALTOR® and the Brokerage many hours of investigation, reports and possible Hearing with the Real Estate Council.
To put it simply – Don’t do it!!

When the going gets "Tough"...just call me.

Susan Tough

No comments:

Post a Comment