Question

Ted, a Michigan real estate broker, referred customer a customer to Broker Wendy in Tampa with the understanding that Ted would receive a portion of any commission earned. The customer purchased a home with Wendy's assistance. If Ted did not participate in the transaction and Wendy mailed Ted a portion of the commissions, which of the following statements applies?

A. The Florida real estate license law was not violated
B. Broker Wendy violated F.S. 475 by paying the commission to Ted
C. Since Ted accepted the commission both brokers violated FS 475
D. Ted violated Florida's real estate license law by asking Wendy to pay a referral fee.

Answer 1

Broker Wendy did not violate Florida real estate license law by paying a commission to Ted, a Michigan real estate broker, as referral fees between licensed brokers across states are permissible.

Step-by-step explanation:

A. The Florida real estate license law was not violated.

In the scenario provided, Ted, a Michigan real estate broker, referred a customer to Broker Wendy in Tampa and later received a portion of the commission from a property sale which Wendy completed. According to Florida Statute 475 regarding real estate brokerage, as long as Ted is a licensed broker in another state, Wendy can share a commission with him. These arrangements, often referred to as referral fees or referral agreements, are permissible and common in real estate practices across states, provided that both parties are licensed real estate brokers or sales associates in their respective states.

Thus, if Ted held a valid real estate broker's license in Michigan, he is entitled to receive the referral fee, and Wendy did not violate Florida real estate laws by sending him the agreed-upon portion of her commission. In this case, Broker Wendy only would be violating F.S. 475 if Ted were not a licensed real estate broker or sales associate.