Rhode Island License Law
Under Rhode Island law, a referral fee may be paid to an unlicensed person:
AIf the amount is under $500
BIf the person refers a buyer to a licensed broker
CNever — referral fees to unlicensed persons are prohibited✓ Correct
DIf the person is a family member of the licensee
Explanation
Rhode Island law prohibits paying referral fees or any compensation to unlicensed persons for referring real estate clients. Only licensed real estate professionals may receive compensation for real estate-related referrals.
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Key Terms to Know
Lien
A financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Closing CostsFees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.
State-Specific Concepts
License Law
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