FREQUENTLY ASKED QUESTIONS

Q: Agents are taking listings out of country but their license only allows them to practice in Florida. How is this possible?

A: (NAR Reply) Technically, this shouldn't be possible as their license restricts them to practice in that specific geographic region. We are encouraging our cooperating associations overseas to file ethics complaints with the local associations where the members belong. We are seeing this happen frequently in the Bahamas, Jamaica and Costa Rica.

Q: How are listing brokers handling commission payments to cooperating brokers from other countries?

A: (NAR Reply) They are using a co-marketing or referral agreement. This has been proven to work for years now and NAR has run into very few issues through these instruments.

Q: Brokers are only allowed to compensate other brokers. However in some countries, agents bring an offer and they don’t have a broker because they are not required to have one based on their license law (or there is no license law). How is this addressed?

A: (NAR Reply) There are only a handful of countries that actually have “brokers” in the terms that we have. A broker in the U.S. is obviously someone with supervisory duties over the sales agents and are distinguishable by their advanced experience or education level. Brokers, again, through the use of a co-marketing or referral agreement have been able to pay these commissions to their equivalent in the country they are working in, which may not be a traditional broker as we know it.

Q: Can a broker pay a referral fee to someone who lives in a country without real estate licensing law?

A: (Florida Realtors® Reply) Section 475.25(1)(h), Florida Statutes, permits a “licensed broker of this state to share a real estate brokerage commission with a broker licensed or registered under the laws of a foreign state so long as the foreign broker does not violate any law of this state.” It’s been FREC’s position that a Florida broker may pay a referral fee or share a commission with someone from a foreign country that lacks licensing requirements so long as: 1) the person has not violated the laws/regulations of the country where the referral is being made and 2) the person has not violated Florida law.

Still have questions? Contact FREE legal hotline