The expelled broker does not receive any additional fees for transactions made by the potential client recruited through the services of the other broker. In addition, after the transfer, the expelled broker and his agents do not carry out any activity justifying a fiduciary duty to the potential client. Their participation is limited exclusively to the intermediation of the interested party. As a result, a provision in the referral fee agreement states that the expelling broker will not advise the potential client or participate in negotiations with him. In California, a „Finder`s Exception,“ which allows an unlicensed person to be compensated for the introduction of parties to a real estate transaction, has been authorized by the courts since 1923. Like the California Supreme Court to Tyrone v. Kelley (1973) 9 Cal.3d 1. In most states, the practice of agents paying referral fees or „Finder`s Fees“ is illegal unless the person is a licensed real estate agent or attorney. The Broker Referral Fee Agreement published by RPI (Realty Publications, Inc.) is used by an agent when it is agreed with another broker or its agent to pay a fee in exchange for the recommendation of a client who needs the services of the other broker. In addition, the Broker Referral Fee Agreement is used to identify the recommended person and document the amount and terms of payment of the referral fee. [See Form RPI 114] Thus, the Broker Referral Fee Agreement in writing serves as proof of the agreed terms for the payment of the recommendation fee earned, which may not be fully clarified in an oral agreement or, worse, forgotten later. Although an oral agreement between brokers is fully enforceable for a referral, a documented agreement clearly states that this form is used by an agent if they agree to receive a fee to be paid by another broker for the transfer of a person who needs the services of the other broker and its agents to document the identity of the recommended person and the terms of payment of the referral fee. The agent should meet with the client to discuss their goals and wishes.
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