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LC00200/2
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S T A T E O F R H O D E I S L A N D
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2000
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A N A C T
RELATING TOBUSINESSES AND PROFESSIONS -- UNDISCLOSED REFERRAL FEES
It is enacted by the General Assembly as follows:
SECTION 1. Title 5 of the General Laws entitled "Businesses and Professions" is hereby amended by adding thereto the following chapter:
CHAPTER 20.9
UNDISCLOSED REFERRAL FEES
5-20.9-1. Definitions. -- When used in this chapter, unless the context otherwise requires:
(1) "Agency contract" means a valid written contract authorizing a real estate licensee to act as a party's exclusive agent for the purchase, sale, or lease of real estate;
(2) "Agency relationship" means the relationship as described under Rhode Island General Laws chapter 5-20.6; and
(3) "Referral fee" means a commission or any other type of compensation for the referral of a potential buyer, seller, lessor, or lessee of real estate.
5-20.9-2. Reasonable Cause. -- Reasonable cause does not exist unless the party seeking the referral fee actually introduced the business to the real estate licensee from whom the referral fee is sought and at least one (1) of the following other conditions exists as between the party seeking the referral fee and the real estate licensee from whom the referral fee is sought:
(1) A Sub-agency relationship;
(2) A Contractual referral fee relationship; or
(3) A Contractual cooperative brokerage relationship.
5-20.9-3. Solicitation of Referral fees; Reduction or withholding of benefits. --
(a) It is unlawful for any person or entity:
(1) To solicit or request a referral fee from a real estate licensee without reasonable cause; or
(2) To threaten to reduce or withhold employee relocation benefits or to take other action adverse to the interests of a client of a real estate licensee because of an agency relationship.
(b) Reasonable cause allows a real estate licensee to solicit or request a referral fee but does not necessarily mean that the licensee had a legal right to be paid a referral fee.
5-20.9-4. Termination of agency contract. -- It is unlawful for a real estate licensee, a relocation firm or a firm with a corporate relocation policy or benefits, or anyone on behalf of any such license or firm, to counsel a client of another real estate licensee on how to terminate or amend an existing agency contract. Communicating corporate relocation policy or benefits to a transferring employee shall not be considered a violation of this part, as long as the communication does not involve advice or encouragement on how to terminate or amend an existing agency contract.
SECTION 2. This act shall take effect upon passage.
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LC00200/2
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EXPLANATION
BY THE LEGISLATIVE COUNCIL
OF
A N A C T
RELATING TO BUSINESSES AND PROFESSIONS -- UNDISCLOSED REFERRAL FEES
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This act would establish a chapter to regulate undisclosed real estate referral fees.
This act would take effect upon passage.
