Expert: liznarr - 9/6/2006

Question
Thank you SO much!! That clears up alot of things and I will call his BIC. This all took place here in DC and the property was in DC and he is a realtor licensed in DC. His broker is located in Virginia.

Would that help?

Thanks!!
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Followup To

Question -
Hi Liz,

I see rave reviews on your advice and knowledge and I hope you can help me.

I used a "friend of a friend" as my realtor when I bought a condo in Washington DC recently. The ONLY reason I used him was because he promised to give me part of his commission. He said he would give me $2000. He wanted it paid to me at closing and had it added to the HUD-1. The lender didn't allow it and they had to take it off and asked him to give it to me outside of closing.

The realtor now refuses to give it to me outside of closing saying it is illegal and he doesn't want to lose his license. I said he should have told me this before and thought about all this when he promised to give me the money if I used him as my realtor.

I have given him several options and iI am getting the sinking feeling that he not going to give me the money.

Is there anything I can do? Can he get in trouble for not fulfilling his promise? Can I report him and could he risk losing his license? Do I have a basis for filing a lawsuit?

Please help!!!

Thank you!

Regards,
DP

Answer -
Hi DP,

It is illegal a broker to pay anyone who is not licensed as a real estate agent to conduct any of the duties or activities that require a real estate license.  As additional information, only a broker-in-charge (BIC) can legally pay any fees/commissions, as opposed to payment coming directly from an agent.

If you did not conduct any of the duties required by a licensed agent to “earn” whatever amount your agent agreed to return/pay to you, your agent’s BIC would need to determine whether or not your state real estate laws allow the payment of any kind of referral fee or return of commission to an unlicensed person.

It is not uncommon for an agent to present a buyer or seller with a gift “at or after” closing, but many states have a limit on the amount/value that can be given.  In addition, some states have laws that prohibit a percentage of the commission, rather than a set amount, to be paid.

It appears as though the agent you used is inexperienced and/or not trained well in your state’s real estate laws.  You are correct in that he should have known in advance before promising you a payment of $2,000.  He certainly is accountable for making promises to you that he could not/would not back up.  Whether the accountability is to the Real Estate Commission or in a Court of Law, or both, is what you need to determine if you want to pursue this further.

Not knowing what state you are in or what your state’s laws are regarding fees paid to an unlicensed person, I am unable to give you a specific answer. You should consult with an attorney for legal advice.

You have several options.  First, I would call this agent’s BIC.  If you cannot reach a resolution with the BIC, you can file a formal complaint with your state Real Estate Commission.  As information to you, the BIC is accountable for the actions (or inactions) of all agents licensed under him, so your complaint to the Real Estate Commission could be against both the agent and BIC for failing to properly supervise his agent.

There is a third option available, but no “teeth” are attached other than the agent possibly being reprimanded and/or fined by any local Realtor association that he might belong to.  To initiate this complaint process, there is a fee involved to file.  If, however, you wish to pursue this, you should first determine whether or not the agent is a member of any Realtor board and make a complaint through them.  The BIC will be able to give you this information.

I hope the above is helpful.  Good luck to you, and feel free to write again if you have additional questions.

Regards,
Elizabeth Narr


Answer
Hi DP,

With a possible cross-over of DC and Virginia laws (which is what I suspected), I’m am not familiar enough with their laws to respond.  I have appointments for the balance of the day and do not have time to research it now, but you have enough to get you started.  What was done to you was just plain wrong, and I applaud you for pursuing the issue.

I hope you get the reaction you need from the BIC and eventually get the $2,000 you were promised.  Let me know your outcome.

Thanks, and good luck to you.

Elizabeth Narr