Referrals Information

• Information

  BCFSA’s information provides clear, concise, easy-to-read explanations of the requirements for real estate professionals under the Real Estate Services Act (“RESA”), Real Estate Services Regulation (“Regulation”), Real Estate Services Rules (“Rules”), and other applicable legislation.

  This information is intended for use by real estate professionals, to support their understanding of the standards they must meet in the delivery of real estate services.

Brokerage Records Related to Referral FeesPermanent link to this section

(a) When Referral Fees Are Received by a Brokerage

There are a number of different ways a referral fee can be earned by you and your brokerage depending on the real estate services being provided. The Real Estate Services Rules state that when a referral fee is received by a brokerage in relation to trading services and the referral is the only real estate service being provided, or when the fee is received in relation to strata management or rental property management services, then the brokerage must retain a record in a form approved by BCFSA indicating:

• The amount of the referral fee;
• The date the brokerage received the referral fee;
• A description of the activity undertaken for which the referral fee was received;
• The name of the person who paid the referral fee; and
• The name of every person who was paid a portion of that fee and the date of such payment.

(b) When Referral Fees Are Paid Out by a Brokerage

When money is paid by your brokerage in relation to trading services in the form of a referral fee and not in connection with a trade in real estate for which a trade record is required, or when a referral fee is paid by a brokerage in relation to strata management services or rental property management services, the brokerage must retain a record in a form approved by BCFSA that indicates:

• The amount of the referral fee;
• The date the brokerage paid the referral fee;
• A description sufficient to identify the purpose for which the referral fee was paid;
• The name of the real estate professional on whose behalf the referral fee was paid; and
• The name of the person the referral fee was paid to.

Paying Referral FeesPermanent link to this section

RESA requires that any remuneration, including referrals, that are paid to a real estate professional must be paid through the brokerage to which they are licensed. When you pay a referral to another real estate professional, you or your brokerage must pay those funds to their brokerage and never directly to them.

If the referral fee is being paid to someone who is not licensed under RESA (and is not prohibited from earning a referral per the Regulation), those funds can be paid directly to that individual. It is important to ensure, however, that the unlicensed person did nothing that requires a license under RESA in order to earn that referral fee.

When you begin working with a client who has been referred to you, you may be inclined to pay the person making the referral a fee. If you choose to do so, that information must be disclosed to your client as it is material information.

Receiving Referral FeesPermanent link to this section

As noted above, you are only able to receive remuneration, including referral fees, through the brokerage to which you are licensed. This is true regardless of whether the referral is being paid by another real estate professional or an unlicensed entity such as a property-inspection company. Non-monetary gifts that you may receive from people as payment for a referral must also go through your brokerage.

If the referral fee you are earning is related to a referral you made for a client, then the referral must be disclosed in writing as material information to your client. This can be included in a service agreement but is most commonly added to a Disclosure of Remuneration form created by BCFSA for your use. Please read the Regulatory Standards Information on Disclosures for more information about the form.

For more information on remuneration, please click here.

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