What Happens When a Referral Fee is Not Paid?

You referred one of your clients to another REALTOR®. Now, you need that referral fee you negotiated. But, it's not being paid.

Other real estate firms can provide referral fees for sending you that client, but after the property closes, what happens when they said they do not owe you one.

While verbal agreements of this sort may create a legally binding contract, it is always best to reduce the terms of an agreement to writing.
Although referral agreements are not required by law to be in writing to be legally enforceable, having an agreement in writing ensures that all parties to the agreement have the same understanding of the terms.

Further, if a disagreement regarding the terms of the agreement arises, having documentation of the agreement may serve as a valuable piece of evidence.

Additionally, salespersons typically do not have the ability to bind their broker to the payment of a referral fee. Any agreements pertaining to the payment of referral fees should be agreed upon in writing by the broker of each company involved.

MAR recommends using the Referral Fee Agreement, Form 521 in the MAR forms library, to memorialize any referral fee agreements.

If you have a disagreement with another REALTOR® brokerage over a referral fee, you can contact CCIAOR's Professional Standards Department about arbitration for that referral fee.