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Can a person who does not have a real estate license receive…

Can a person who...

Can a person who does not have a real estate license receive a referral fee for referring a client to a real estate licensee?

Lawyer's Assistant: Because real estate law varies from place to place, can you tell me what state this is in?

California

Lawyer's Assistant: Has any paperwork been filed?

No. no contact has been made with the potential client, and no contact has been made with the broker.

Lawyer's Assistant: Anything else you want the lawyer to know before I connect you?

In this scenario, I will not have any contact with the potential real estate seller.

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Answered in 5 minutes by:
12/17/2016
Ray
Ray, Lawyer
Category: Real Estate Law
Satisfied Customers: 48,189
Experience: Texas Attorney for 30 years dealing in real estate
Verified

Hi and welcome to JA. Ray here to help you today.Please bear with me a few moments while I review your question, conduct and prepare your response.

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California allows finders or referral fees.Here in California, the Bureau of Real Estate and California law permit a licensed real estate brokerage to pay a referral fee for a real estate transaction to a person not licensed by the Bureau of Real Estate, only if the person who is to get such a fee was not soliciting on behalf of the brokerage. In short, this “finder’s fee” only applies if the unlicensed individual is solely limited to the introduction of a seller, buyer or both to a licensee. The caveat is that the “finder” is not involved in any negotiations as to the real estate transaction.

In California, a “finder’s exception,” allowing an unlicensed person to be compensated for introducing parties to a real estate transaction, has been judicially approved since 1923. As explained by California’s Supreme Court in Tyrone v. Kelley (1973) 9 Cal.3d 1.

“Numerous cases have held that one who simply finds and introduces two parties to a real estate transaction need not be licensed as a real estate broker. Such an intermediary or middleman is protected by the finder’s exception to the real estate licensing laws, an exception first established in Shaffer v. Beinhorn (1923) 190 Cal. 569, 573-574. In that case, this court held that a person who contracted to introduce a seller to a prospective purchaser did not act as a broker but as a finder. Many subsequent cases have recognized the exception.

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Ray
Ray, Lawyer
Category: Real Estate Law
Satisfied Customers: 48,189
Experience: Texas Attorney for 30 years dealing in real estate
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DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).

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