Florida Real Estate Sales Associate Examination Content OutlineReal Estate Brokerage Activities and ProceduresEasy
A licensed real estate sales associate in Florida accepts a referral fee from a mortgage broker for directing a client to them. Which of the following is true regarding this action?
- AIt is permissible as long as the client is informed and approves of the fee.
- BIt is a violation of RESPA and Florida real estate license law.
- CIt is allowed if the sales associate also provides a portion of their commission to the mortgage broker.
- DIt is only a violation if the sales associate does not disclose the fee on the closing statement.
Show answer & explanationAnswer & explanation
Correct answer: B. It is a violation of RESPA and Florida real estate license law.
Accepting referral fees from mortgage brokers, title companies, or other service providers in exchange for business is prohibited by the Real Estate Settlement Procedures Act (RESPA) and Florida real estate license law, regardless of disclosure.
Why the other options are wrong
- A. Disclosure does not make a RESPA violation permissible.
- C. This would also likely constitute a violation and would not negate the initial prohibited kickback.
- D. Disclosure does not legalize an otherwise illegal kickback arrangement.
RESPA Kickbacks
The Real Estate Settlement Procedures Act (RESPA) prohibits kickbacks and unearned fees in connection with a federal mortgage loan.
- Prohibits referral fees between settlement service providers.
- Applies to mortgage brokers, title companies, agents, etc.
- Violation regardless of disclosure or client approval.
Memory trick: No 'Referral Riches' in Real Estate - RESPA says No!