Can a licensed insurance agent demand a referal fee for referring business?
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Can a licensed insurance agent demand a referal fee for referring business?
A real estate deal was referred to a realtor. The insurance agent that referred the business is demanding a fee be paid from the realtor even though the realtor has told him that it is illegal for her to pay him a fee under any circumstances. I would like to know if it is legal for him as a licenced insurance agent is allowed to accept referral fees? In TX.
Asked on January 8, 2011 under Business Law, Texas
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
The best thing to do here is to call the Texas State Board of Realtors and to ask. Referral fees or fee split arrangements are common with certain types of businesses but generally within the same profession. Attorneys can refer cases to other attorneys and real estate agents often split their fees. So the real estate agent may in fact be correct: it may be illegal for her to pay a referral fee or enter in to a split fee arrangement with anyone other than a licensed real estate broker. The Texas Board of Realtors may have the information on their website as well but for members only so inquiry is probably necessary.
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