**CONVENTION EARLY BIRD 7/25! CLICK HERE**
Register for Fall Convention! Early Bird Deadline TOMORROW!
We want you to save your place—and to save $$—for a great event, Sept. 13-16 at The Peabody. Scroll down for details or head straight for the Registration page HERE.
Our 2017 Fall Convention will begin with a HUGE kickoff.We’ll have BB King’s on Beale all to ourselves, and it’s included in your registration fee. Leon Dickson, Sr., our 2017 President-Elect, gives the scoop in this video. CLICK TO PLAY!
State Committee Nominations: Open until Aug. 31
Are you ready to serve in statewide leadership? Submit an application for a 2018 Tennessee REALTORS®committee, RPAC Trustee and/or TREEF Trustee position. To be considered, you MUST apply by Aug. 31, 2017. Committee and
RPAC trustee positions, go HERE. TREEF trustee positions, go HERE. (member login required)
Good for Us: Feds Release TRID Mortgage-Disclosure Rule
The Consumer Financial Protection Bureau (CFPB) has released the final rule amending the “Know Before You Owe” (KBYO or TRID) mortgage-disclosure rule. As advocated by NAR, the final rule clarifies the ability to share the Closing Disclosure (CD) with third parties—a victory for real estate professionals nationwide. Read more HERE.
Local Presidents-Elect Sharpen Leadership Skills
We LOVE our 2017 Presidents-Elect, many of whom joined us for a recent leadership session. This awesome group is investing time, talent and energy to help make our 21 associations ROCK throughout Tennessee. Go HERE to see who’s who in the photo (and Like our Facebook page!). Go HERE for our full Leadership Directory (member login required).
10 Ways to Benefit from RPR
For anyone getting started with REALTORS® Property Resource (RPR), an NAR service, HERE is a helpful checklist you can download.
Home Equity and Retirement: July 26 Webinar
As busy independent contractors, it can be challenging to plan and invest for our own later years. Even if you have retirement accounts and will draw social security, home equity could be an income source. Reverse Mortgage Funding will present a webinar Wed.,
— What resources can help financially if delaying social security benefits is beneficial?
— What are the pros and cons of home-equity finance tools?
— How can home equity help increase long-term social security benefits?
— What are the differences between a home equity line of credit and a reverse mortgage line of credit? to answer questions including:Register HERE.
Must-Have Tech Tools for You — Webinar 7/26
Update your knowledge of tech apps, tools, gadgets and more in a free webinar with Craig Grant and Amy Smythe-Harris of the Real Estate Technology Institute (RETI), a Tennessee REALTORS® partner, 3 p.m. EDT/2 p.m. CDT this Wed. 7/26. Register HERE.
**LAST DAY OF EARLY-BIRD REGISTRATION!**
Save $ by registering for our 2017 Fall Convention by the early-bird deadline—Tues., July 25—AND you’ll be entered to win back your $250 registration fee.
TREC-Required Instructor Training: July 25 & 26
For aspiring instructors, MTAR will host this two-day course taught by Steve Champion. *This is currently the only LCIT course scheduled in Tenn.* Details below. Register HERE.
Memphis YPN’ers Strengthen Friendships, Raise RPAC Awareness
Kudos to the Memphis Area Association of REALTORS® (MAAR) on its recent Young Professionals Network (YPN) event at hot spot Loflin Yard in partnership with the REALTORS® Political Action Committee (RPAC). Special guests at the bash included Shelby County Trustee David Lenoir. Among the volunteer leaders who made the celebration happen are Memphis YPN Committee President Albert Lee, YPN VP Fara Captain, RPAC Chair Lynn Pfund, and RPAC Committee member Matt Morgan. Hats off also to staff leaders Melanie Blakeney, Ken Scroggs and Kaitlin O’Malley. To learn more about investing in RPAC, visit HERE.
Purple-Paint “No Trespassing” Law Takes Effect
HERE is a TV news story about legislation that we worked on this year. The new law, enacted 7/1, authorizes property owners to give notice that trespassing is prohibited by marking trees and/or posts with purple paint as an alternative to putting up signs.
Source: Tennessee REALTORS® Legal & Ethics Hotline Counsel
When Referral Fees Are Not Appropriate
Referral fees are common practice when licensees refer clients to each other. There are laws and rules regarding who may receive such fees and under what circumstances. This week’s Q&As address when it is, and isn’t, appropriate to send a referral fee.
Required to Pay Fee to Relocation Company?
Q: A previous client of mine works for a local company that hired a new employee who is relocating from out of state. My previous client gave the employee my name as an agent. The company is offering a relocation package for the employee, and the relocation service is asking me to agree to their terms to become an agent in their system and pay them a hefty referral fee. Since I was introduced to this buyer outside of the relocation company, am I required to work through them and pay them a referral fee?
A: No, you are not.
First and foremost, only licensed real estate agents can receive referral fees. Pursuant to Tenn. Code Ann. § 62-13-302(a): It is unlawful for any licensed broker to employ or compensate any person who is not a licensed broker or a licensed affiliate broker for any of the acts regulated by this chapter. A licensed nonresident broker may pay a commission to a licensed broker or another state if such nonresident broker does not conduct in this state any of the negotiations for which a commission is paid.
You cannot send a referral fee to someone who does not have a real estate license. If the firm holds a real estate license, they are likely not entitled to a referral fee due to the statutes below. Tenn. Code Ann. § 62-13-602. Reasonable cause to solicit referral fee.
Reasonable cause does not exist unless the party seeking the referral fee actually introduced the business to the real estate licensee from whom the referral fee is sought and at least one (1) of the following other conditions exists as between the party seeking the referral fee and the real estate licensee from whom the referral fee is sought:
(1) Sub-agency relationship
(2) Contractual referral fee relationship; or
(3) Contractual cooperative brokerage relationship.
Tenn. Code Ann. § 62-13-603. Unlawful referral solicitation – Unlawful retribution for existence of an agency relationship.
(a) It is unlawful for any person or entity to:
(1) Solicit or request a referral fee from a real estate licensee without reasonable cause; or
(2) Threaten to reduce or withhold employee relocation benefits or to take other action adverse to the interests of a client of a real estate licensee because of an agency relationship.
(b) Reasonable cause allows a real estate licensee to solicit or request a referral fee but does not necessarily mean that the licensee has a legal right to be paid a referral fee.
Therefore, the relocation company would have had to introduce the customer to your firm in order to lawfully request a referral fee.
Referral Fee to Inactive Licensee?
Q: Can you pay a referral fee to an agent who has an inactive license?
A: If an agent was licensed when a contract was executed, then he may be entitled to receive a commission or referral fee, even though the agent’s license is now retired or inactive. Commission is earned upon the signing of the lease, purchase and sale agreement, etc. Therefore, if he was licensed at that time and if his independent contractor’s agreement or office policy dictates that he is to receive commission or referral fee after leaving the company, then he may be entitled to receive it. If his license was already inactive when the contract the signed, he may not receive a referral fee.
Give a Percentage of Sales Back to a School?
Q: May I offer a percentage of each sale coming to me through a particular source back to that source out of each closing? I would like to offer a percentage back to my daughter’s public school for any business coming in to me through the school.
A: This practice is not advisable. If the “donation” is in cash, TREC could interpret this as violating the statute. Under state law, gifts may not take the form of cash or converted into cash in any way. Tenn. Code Ann. § 62-13-302(b) states: “A real estate licensee shall not give or pay cash rebates, cash gifts or cash prizes in conjunction with any real estate transaction. As part of the Tennessee Real Estate Commission’s general rulemaking authority, the Commission may regulate the practices of real estate licensees in regard to gifts, prizes or rebates that are not otherwise prohibited by law.”
Further, only licensed real estate agents can receive referral fees in Tennessee. Also, while a licensee is permitted to give someone a gift to induce them to do business, it must be an incentive for that person to do business with you, not their friend or family member (i.e. a referral).
You could provide a gift card to a charity or purchase items from their wish list. If you want to give a donation in the form of a gift card or other non-monetary donation in the name of a client, you will have to follow the gifts and prizes rule under TREC Rule 1260-2-.33:
(1) A licensee may offer a gift, prize, or other valuable consideration as an inducement to the purchase, listing, or lease of real estate only if the offer is made:
(a) Under the sponsorship and with the approval of the firm with whom the licensee is affiliated; and
(b) In writing, signed by the licensee, with disclosure of all pertinent details, including but not limited to:
1. accurate specifications of the gift, prize, or other valuable consideration offered;
2. fair market value;
3. the time and place of delivery; and
4. any requirements which must be satisfied by the prospective purchaser or lessor.
In addition, you should be aware of a new section of the Advertising Rule that includes advertising offers or gifts. TREC Rule 1260-2-.12(5) states:
(5) Guarantees, Claims, and Offers
(a) Unsubstantiated selling claims and misleading statements or inferences are strictly prohibited.
(b) Any offer, guaranty, warranty or the like, made to induce an individual to enter into an agency relationship or contract, must be made in writing and must disclose all pertinent details on the face of such offer or advertisement.
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