Leilani is a licensed real estate broker in Hawaii who operates her own brokerage. She receives a referral fee from an out-of-state mortgage lender for every client she sends to that lender. Under HRS Chapter 467 and applicable Hawaii law, which of the following statements is most accurate regarding this arrangement?
Correct Answer
A) The arrangement is permissible as long as Leilani discloses the referral fee to her clients in writing
Under HRS Chapter 467 and consistent with RESPA requirements applicable in Hawaii, a real estate broker may receive a referral fee from a mortgage lender provided that the fee is properly disclosed to the client. Undisclosed referral fees that create undisclosed conflicts of interest violate the broker's fiduciary and disclosure duties. Written disclosure to the client is the key requirement that makes such an arrangement permissible.
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Related Topics & Key Terms
Key Terms:
Related Concepts
License requirements are the mandatory qualifications—including pre-licensing education, examination, and background checks—that a person must satisfy before legally practicing real estate. These requirements are established and enforced by each state's real estate commission.
Market allocation is an illegal antitrust practice in which competing real estate brokerages agree to divide markets among themselves by geographic area, property type, or price range, thereby eliminating competition.
Price fixing is an illegal antitrust practice in which competing real estate brokerages agree to charge the same commission rates, fees, or other pricing for their services. It is a per se violation of the Sherman Antitrust Act.
More Practice Of Real Estate Questions
In Wyoming real estate practice, an associate broker or salesperson is not associated with a responsible broker at renewal. What should the licensee remember?
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A Wyoming licensee is reviewing an out-of-state salesperson applicant prepares for testing. What is the best answer?
In Wyoming real estate practice, a salesperson applicant age is reviewed. What should the licensee remember?
A responsible broker in Wyoming asks about a nonresident applicant provides home-state evidence. Which answer follows Wyoming law?
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