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Principal Broker Tip of the Month

James Petersen - Reviewing Principal Broker

ORS 696.290¹: Sharing compensation with or paying finder’s fee to unlicensed person prohibited

There seems to be a rash of questions lately regarding the topic of commission – who can pay, who can receive, kickbacks to buyers, incentives from outside entities, and so on.

Oregon Revised Statutes Title 52 (Occupations and Professions), Chapter 696 (Real Estate and Escrow Activities), Section 290 (Sharing compensation with or paying a finder’s fee to unlicensed person prohibited) couldn’t be clearer on this topic: COMMISSION SHARING IS ILLEGAL IN OREGON. Part of the Statute reads as follows:

(1)(a) Except as provided in paragraph (b) of this subsection, a real estate licensee may not offer, promise, allow, give, pay or rebate, directly or indirectly, any part or share of the licensee’s compensation arising or accruing from any real estate transaction or pay a finder’s fee to any person who is not a real estate licensee licensed under ORS 696.022 (Licensing system for real estate brokers and property managers), including a nonlicensed individual described in ORS 696.030 (Exemptions).

(b) A principal real estate broker may pay a finder’s fee or a share of the real estate licensee’s compensation on a cooperative sale when the payment is made to a licensed real estate broker in another state or country, provided that:

(A) The state or country in which the nonresident real estate broker is licensed has a law permitting real estate brokers to cooperate with principal real estate brokers in this state; and

(B) The nonresident real estate broker does not conduct in this state any acts constituting professional real estate activity and for which compensation is paid. If a country does not license real estate brokers, the payee must be a citizen or resident of the country and represent that the payee is in the business of real estate brokerage in the other country.

If you have any questions or need further information on this topic, please feel free to contact Colleen, Paul, or myself.

James Petersen

Reviewing Principal Broker

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