A real estate salesperson in Helena, Montana receives a referral fee from a mortgage lender for every buyer client she sends to that lender. The salesperson has not disclosed this arrangement to her buyer clients. Under Montana law and applicable regulations, which of the following is most accurate?
Correct Answer
A) This arrangement may violate RESPA and Montana's licensing law, which requires disclosure of all compensation received in connection with a transaction.
Undisclosed referral fees from a mortgage lender to a real estate licensee likely violate RESPA's prohibition on kickbacks for settlement service referrals and also conflict with Montana licensing law requirements under MCA Title 37, Chapter 51, which obligates licensees to disclose all compensation received in connection with a real estate transaction. Failure to disclose creates a conflict of interest and may constitute grounds for disciplinary action by the MBRR.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Broker supervision is the legal obligation of a designated or managing broker to oversee and be accountable for the real estate activities of all salespersons and associate brokers operating under their license.
Commingling is the illegal act of mixing client funds with a broker's personal or business operating funds, while conversion is the unauthorized use of client funds for the broker's own benefit. Both are serious violations that can result in license revocation.
Commingling is the illegal act of mixing client trust funds with a broker's personal or business operating funds; conversion is the misappropriation of those funds.
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?
In Wyoming real estate practice, a first-time salesperson applicant completes coursework. What should the licensee remember?
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?
- → A responsible broker in Wyoming asks about a first-time salesperson applicant prepares for Wyoming-specific licensing. Which answer follows Wyoming law?
- → Which Wyoming rule applies when an out-of-state salesperson applies for Wyoming licensure?
- → A responsible broker in Wyoming asks about the Commission director receives a complaint about real estate practice. Which answer follows Wyoming law?
- → For the Wyoming salesperson state portion, a first-time Wyoming salesperson applicant starts the application process. Which statement is correct?
- → A Wyoming licensee is reviewing all first-time salesperson steps are otherwise complete. What is the best answer?
- → For the Wyoming salesperson state portion, a licensee asks how long Wyoming renewal periods are. Which statement is correct?
- → Which Wyoming rule applies when a licensee does not timely submit the complete renewal application, proof of CE, and renewal fees?
- → Which Wyoming rule applies when the Commission acts on license issuance and discipline?
- → In Wyoming real estate practice, a written sworn complaint or Commission motion starts a disciplinary matter. What should the licensee remember?
- → A Wyoming licensee is reviewing a first-time salesperson applicant asks which prelicense courses are required. What is the best answer?
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