| A
real estate licensee who acts as the agent for either
party in the sale, lease or exchange of real property,
a mobile home, or a business opportunity must disclose
to both parties the form, amount, and source of any
compensation received or expected to be received from
a lender involved in financing related to the transaction.
This is required even if the broker does not handle
the financing aspect of the transaction. The disclosure
must be given to each party to the transaction before
the transaction closes escrow. Real estate licensees
must disclose to their principals all compensation,
or expected compensation, regardless of the form, time,
or source of payment.
Commissioner’s Regulation
2904
Business and Professions Code Sections 10176(a) and
(g)
Note: California Business and Professions
Code Section 10177.4 prohibits certain referrals for
compensation. A real estate licensee may not receive
compensation for referring customers to any escrow agent,
structural pest control firm, home protection company,
title insurer, controlled escrow company, or underwritten
title company. Further, receipt of such compensation
from an employee of a title insurer, underwritten title
company or controlled escrow company constitutes commercial
bribery. See Penal Code Section 641.4.
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