Under RESPA and CH 475, when is compensation allowed?

• A. When a service has been provided, the recipient is licensed, and all parties advised of payment.
• B. Only if sale closes.
• C. Only if the recipient is unlicensed.
• D. Always.

Answer: (A)

The key idea here is that compensation for real estate services is allowed only when there is a legitimate service performed, the recipient is licensed, and all parties are informed about the payment. Under RESPA, kickbacks and unearned fees are prohibited, so any payment must be tied to actual services rendered and disclosed to everyone involved. Florida’s CH 475 reinforces this by requiring that compensated real estate activities be conducted by licensed individuals and disclosed to the parties.

So, compensation is allowed when a service has been provided, the recipient holds a valid license, and all parties to the transaction are advised of the payment. Payments based solely on a closing, payments to unlicensed individuals, or payments without disclosure do not meet these requirements.