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The Kansas Real Estate Commission prepared this email to provide an overview of common violations. This is an example only, as different facts in a case may result in a different outcome.
Question
Mr. Karry is ready to buy his first home and contacts Salesperson Joe. Salesperson Joe provides Mr. Karry with the brokerage relationship brochure and Mr. Karry decides to sign a buyer agency agreement. The agreement is for one year. For the first few weeks, things go well. Salesperson Joe shows Mr. Karry several properties but none are the right fit.
Two months into the buyer agency agreement, Mr. Karry is frustrated with the process and Salesperson Joe. Mr. Karry decides to wait on buying a home and sends Salesperson Joe an email stating he is cancelling the buyer agency agreement. Salesperson Joe tells Mr. Karry that he does not agree to cancel the agreement. Mr. Karry responds that he has no intention of continuing to work with Salesperson Joe.
A month later, Mr. Karry finds the home he wants to buy. A friend refers him to Salesperson Tammy. Salesperson Tammy asks Mr. Karry if he is working with another real estate professional. Mr. Karry says he is not and agrees to a transaction broker relationship. Salesperson Tammy assists Mr. Karry with writing an offer and, later that day, the offer is accepted by the seller.
Inspections are completed, the loan is secured, and Mr. Karry is ready to close. The day before closing, Salesperson Joe finds out about the transaction. Salesperson Joe contacts Salesperson Tammy and informs her of the buyer agency agreement. This is the first time that Salesperson Tammy hears about the buyer agency agreement. Salesperson Joe tells Salesperson Tammy the buyer agency agreement will be cancelled if a referral fee is paid. Salesperson Tammy tells Salesperson Joe that he is violating Kansas law and a referral fee will not be paid.
Did Salesperson Joe violate Kansas law?
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Answer
Yes. Kansas law has specific requirements regarding a licensee soliciting a referral fee. Salesperson Joe did not meet any of the criteria to solicit a referral fee in the scenario above. Salesperson Joe violated 58-3076(a).
58-3076(a). A licensee or anyone on behalf of any such licensee or firm, whether licensed in this state or in another state, shall not solicit a referral fee without reasonable cause. Reasonable cause shall not exist unless one of the following conditions exists:
(1) An actual introduction of business has been made;
(2) a contractual referral fee relationship exists; or
(3) a contractual cooperative brokerage relationship exists.
For more requirements, see K.A.R. 86-3-15.
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