I receive a lot of email and phone inquiries from brokers asking about how they can legally receive referral fees (or rebates or discounts) when they want to purchase or sell properties in markets outside their jurisdiction.

I also receive questions about other commission practices (such as fee-splitting) and whether or not non-traditional brokerage firms are operating lawfully.

Brokers also ask me if they are entitled to their commissions if buyers or sellers default on a sales contract and they want to know if they have to pay out-of-state brokers referral fees.

Brokers want quick answers to these pressing questions, but the answers are very nuanced. In order to address these issues, we have to review some basics about which individuals need a license to receive or pay compensation. We will start with a review of what the NC Real Estate Commission (NCREC) requires in terms of licenses. A review of typical compensation clauses in listing, representation and sales agreements is also helpful.

We also will look at NCREC rules regarding receiving compensation; the Real Estate Settlement Procedures Act (RESPA); the Sherman-Clayton Anti-Trust Act; some interesting litigation on the issue of brokerage compensation; and non-traditional brokerage models.