TRIVIA: Can a Real Estate Attorney be paid commission.......

By
Real Estate Agent with Robert J Russell Companies

TRIVIA QUESTION:

A Real Estate Attorney is representing a buyer in the purchase of a home. The Real Estate Attorney does not have his a Real Estate license but is licensed to practice Real Estate Law. Is this Attorney entitled to commissions in the Real Estate transaction ?

If you are an Attorney, Realtor, Loan Officer, Know-It-All or anyone who wants to answer - give us your opinion.

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Rainmaker
142,110
Suzanne Taylor
361-510-5413 http://www.CorpusChristiHomeFinderOnline.com - Corpus Christi, TX
Home Sales In Corpus Christi, TX

Not a know-it-all but will answer yes.

Mar 04, 2011 10:36 PM #1
Rainmaker
1,067,744
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

I think it depends on the statutes of each state... I'll be back to see what other think.

Mar 04, 2011 10:37 PM #2
Rainmaker
125,893
Robert J. Russell
Robert J Russell Companies - Flower Mound, TX
IRES, ICREA, CLU, LUTCF, Broker

I think this will make for some interesting answers!

Mar 04, 2011 10:41 PM #3
Rainmaker
168,565
Larry Bergstrom
Crescent Realty, Inc. Spanaway, WA. - Spanaway, WA
CNE, CRS, GRI

in my state the answer is yes. It might not be called a commission, but none-the-less.

Mar 04, 2011 10:43 PM #4
Rainmaker
26,100
Lee Ann Monfredini
Patten and Monfredini at Pacific Union Internation - San Francisco, CA

In San Francisco the answer is no-but am eager to hear about other places

Mar 04, 2011 10:48 PM #5
Rainmaker
536,364
Lynda Eisenmann
Preferred Home Brokers - Brea, CA
Broker-Owner,CRS,CDPE,GRI,SRES, Brea,CA, Orange Co

Hi there,

I don't see why not, they may "call" it something other than a commission.

However that would also need to be an agreed upon by the seller. In my State of CA you need to be licensed to be a member of the MLS. And the offer of compensation is made through membership of the MLS.

Mar 04, 2011 10:51 PM #6
Rainer
145,246
Sarasota & Manatee Counties FL
SaraMana Properties - QuickFreeMLS.com - Bradenton, FL
QuickFreeMLS.com - Listings In Paradise

I don't know Texas law. Generally speaking though, in the scenario you gave, "No."

Mar 05, 2011 12:52 AM #7
Rainmaker
125,893
Robert J. Russell
Robert J Russell Companies - Flower Mound, TX
IRES, ICREA, CLU, LUTCF, Broker

Here is what I have found so far.....

For attorneys, especially those specializing in real estate law, it is common to perform activities that fall within the definition of brokerage as an integral part of their practice. Not exempting attorneys from TRELA (Texas Real Estate License Act) would require many attorneys to obtain a salesperson or brokerage license in addition to their license to practice law.  Necessarily, most states exempt attorneys from their real estate licensure statutes. Although TRELA does not contain any language limiting the attorney exemption, Texas courts, as well as the courts of other jurisdictions, have offered their own interpretations of the extent to which attorneys are exempt from real estate licensure statutes. ... The Texas legislature addressed such situations when it re-evaluatedTRELA in 1991. In its review, the legislature retained the provisions of TRELA that forebode salespersons and brokers from sharing their fees for performing a brokerage function with anyone other than a salesperson or broker. Furthermore, TREC remained authorized under this amendment to suspendor revoke an issued license or take other disciplinary action if the salesperson or broker shares such a fee in violation of TRELA.

Mar 05, 2011 07:40 AM #8
Rainmaker
618,135
Sheila Newton Team -- Anderson & Greenville SC Real Estate
Berkshire Hathaway HomeServices - C. Dan Joyner - Anderson, SC
25 years experience -Residential Real Estate Sales

I don't know for sure, but I don't think it should be a yes answer even if it is....

Mar 05, 2011 05:46 PM #9
Ambassador
2,410,820
Patricia Kennedy
Evers & Company Real Estate, Inc. - Washington, DC
For Your Home in the Capital

Robert, a lot of agents here in DC have law degrees, and some are members of the DC Bar.  They also have real estate licenses, even though attorneys may practice real estate under an exemption. 

Mar 05, 2011 10:28 PM #10
Rainmaker
125,893
Robert J. Russell
Robert J Russell Companies - Flower Mound, TX
IRES, ICREA, CLU, LUTCF, Broker
Patricia you didn't answer the question - you reworded what I said - what is your answer
Mar 06, 2011 03:46 PM #11
Rainmaker
125,893
Robert J. Russell
Robert J Russell Companies - Flower Mound, TX
IRES, ICREA, CLU, LUTCF, Broker

Here is the official answer in Texas:

* Q:     An attorney told me that her client had attended an open
house for one of my listings and wanted to make an offer on the property.
The attorney told me she was preparing an offer for her client and insisted
that I pay her the same fees I had offered to cooperating brokers in the
MLS. The attorney does not have a broker's license. Can I pay the attorney
the coop fee if this offer is accepted by my client? (updated Nov. 25, 2009)
          o

            A:    The Texas Real Estate License Act (Texas Occupations Code,
Section 1101.652(b)(11)) provides that a broker can lose his license for
paying a fee to anyone not licensed as a real estate broker or salesperson
in Texas or any other state for compensation for services as a real estate
agent. While the attorney is exempt from regulation under the Texas Real
Estate License Act, you are not; you would face disciplinary action for
violating the act. Certainly, the attorney is permitted to represent clients
in real estate transactions by virtue of her license to practice law. It
does not follow that you can pay that attorney the coop fee for her
representation of her client. The attorney can and should seek compensation
for her services from her client.
++++++++++++++++++++++++++++++++
    Q:    After twice showing a prospective buyer one of my listings,
he informed me that he was a licensed attorney, would prepare his own
contract offer, and demanded to be paid the cooperating broker's fee in the
transaction. He does not have a broker's license. Can I pay him the coop
fee? Do I have to pay him? (updated Jan. 1, 2002)
          o

           A:    While the Real Estate License Act prohibits sharing a
broker's fee with a person not licensed as a broker or salesperson "for
services as a real estate agent," an essential element in the definition of
a real estate agent is that the person performs an activity described in
Section 2(2) of the Real Estate License Act "for another person."

            Since a principal in a transaction does not act for another
person, he would not fit the definition of a real estate agent. Therefore, a
broker is not prohibited by the Real Estate License Act from sharing a fee
with a principal, regardless of the principal's profession.

            Although a broker may share part of the broker's fee with a
principal, there is no requirement that the broker do so. Concessions of
part of the broker's fee to a principal is a business decision of the
broker. However, brokers should consider sharing the fee with a
buyer/principal only with full disclosure to all parties, including the
seller, the listing broker, and any lender involved in the transaction. Any
fee-sharing arrangement should be included in the contract.

            It should be noted that the Real Estate License Act prohibits a
broker from sharing the broker's fee with an attorney who is not a principal
but is representing a party to the transaction.

Mar 07, 2011 10:15 PM #12
Rainer
126,166
Brian Doubleday
Brian Doubleday - IML RealEstate - Orange County, CA Broker - Ladera Ranch, CA
Ladera Ranch, Foothill Ranch, Lake Forest, Mission Viejo

Great debate, you've raised a great question and got some interesting points

Mar 10, 2011 06:27 PM #13
Anonymous
Anonymous
Joe Lumbley, Texas Realtor(r)

No, a broker can lose his license for such an action.  Here's a link from the Texas Association of Realtors explaining the options:

http://www.trec.state.tx.us/pdf/articles/other/tar_001.pdf

May 20, 2011 02:09 PM #14
Anonymous
Anonymous
Joe Lumbley

Left out the phrase, "in Texas" in #14 above.  This advice is based upon Texas Law.

May 20, 2011 02:11 PM #15
Anonymous
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Rainmaker
125,893

Robert J. Russell

IRES, ICREA, CLU, LUTCF, Broker
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