Broker Greg is affiliated with Managing Broker Helen's office. Greg negotiates a real estate transaction and the parties agree that Greg will receive a bonus directly from the seller in addition to the regular commission split. The seller writes the bonus check directly to Greg personally. Under Indiana law, which of the following best describes the legality of this arrangement?
Correct Answer
C) This is a violation because Indiana law requires all compensation to a broker to be paid through the managing broker, not directly to the affiliated broker
Under IC 25-34.1, compensation for real estate services must flow through the managing broker to the affiliated broker. An affiliated broker may not receive compensation directly from a party to a transaction — all fees, commissions, and bonuses must be paid to the managing broker's firm, which then compensates the affiliated broker. Receiving direct payment from a seller bypasses this required channel and violates Indiana licensing law.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The National Do Not Call Registry is a federal program administered by the FTC that allows consumers to opt out of receiving unsolicited telemarketing calls, including calls from real estate agents soliciting business.
Brokers in Florida have strict responsibilities for managing escrow accounts, including monthly reconciliation and proper handling of trust funds.
FREC has the authority to impose fines and other disciplinary actions on licensees who violate real estate laws and rules.
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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