What is true about a commission rebate where the client is not licensed?

• A. Rebates are prohibited.
• B. The rebate must be disclosed to all parties.
• C. Only the buyer needs to be informed.
• D. Disclosures are optional.

Answer: (B)

In Florida, when a licensee offers a commission rebate to a client who isn’t licensed, transparency is required: the rebate must be disclosed to all parties involved in the transaction. This ensures everyone knows the financial arrangement and can see how the compensation is being handled, which helps prevent hidden incentives or misunderstandings about who is paying and how the deal is structured. The disclosure is typically documented so the closing statement reflects the rebate as a credit to the buyer or a reduction in the seller’s or broker’s compensation, as appropriate. Since disclosure to all parties is the standard rule, the statement that disclosures must be made to everyone is the correct one. Rebate rules are not that they’re prohibited or optional, and everyone involved in the transaction—not just the buyer—needs to be informed.