List Only

Apartment "finders fee" or "refferal fee"?

State: TX or CA Can an apartment owner offer a referral fee to non-agents (people without a real estate license) for locating a new tenant? Can people accept an referral fee if they do not have a real estate license? something like: "tell your friends about us and if they sign a 6-12 month lease we will give you a $300 referral fee"

Public Comments

1. It is not legal. A "fee" can only be paid to someone who is registered by the state as a licensed agent. That way all the money can be accounted for. In real life, it is done all the time and no one is prosecuted.
2. Do not know about California but it is legal in Texas. It is merely a Finders Fee to get additional renters in and you do not need a realtors license to recommend people for an apartment.
3. It is illegal in CA. It is legal for them to offer a discount on rent, but not any cash. I can not imagine it is legal in TX either as it is illegal for non-agents to represent the owner.
4. Actually it does depend on the state and it is usually legal since a referral is not acting as a representative for the owner. In Arizona: "A. Notwithstanding sections 32-2155, 32-2163 and 32-2165 or any other provision of this chapter, a property management firm or a property owner may: 1. Pay a finder fee to an unlicensed person who is a tenant in an apartment complex managed by the firm or owned by the owner." Some states limit the amount of fee that can be given but in general is is not illegal and there is no problem with it. Remember though that if paid in cash then it is income to the IRS.