Broker Chen operates a Wisconsin real estate firm and has hired three salespersons. One of his salespersons, Amy, receives a referral fee directly from an out-of-state broker for sending a Wisconsin buyer to that broker. Amy did not disclose this referral fee to Broker Chen or to the buyer. Under Wisconsin law, which of the following best describes the proper handling of this referral fee?
Correct Answer
C) The referral fee must be paid to Broker Chen's firm, and Amy may only receive compensation through her supervising broker
Under Wisconsin Statutes Chapter 452, a salesperson may only receive compensation for real estate activities from their supervising broker — not directly from third parties, including other brokers. Any referral fee earned in connection with Amy's real estate activities must be paid to Broker Chen's firm, and Amy may then receive her share through the broker. Accepting compensation directly from an outside broker — without routing it through the supervising broker — violates Wisconsin's compensation structure for salespersons.
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Related Topics & Key Terms
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Related Concepts
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.
Florida brokers are required to maintain transaction records and escrow records for a minimum of five years.
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