« Go Back

Legally speaking: Can I accept a ‘perk’ from a title agent?

By Lorie Garland, OAR Assistant Vice President of Legal Services

The OAR Legal Assistance Hotline receives an array of real estate-related legal questions — including license law issues, disclosure, contract law, ethics and commission problems, among others. In an effort to help you work within the law, our “Legally Speaking” series spotlights some of the timely questions that are being asked by REALTORS. This one involves whether an agent can accept a gift from a title company… 

Q: There is a title company in my area that has handled several of my closings. After my most recent closing the title agent thanked me for the business I have sent to the company and expressed his desire for that to continue. He stated that title agents are prohibited from making cash payments to real estate agents for referrals but that he could pay some of my marketing expenses, such as the cost of my business cards and promotional flyers. Is it permissible for a title agent to pay for a real estate agent’s marketing materials?

A: There are federal and state laws that prohibit any type of payments between title agents and real estate agents for the referral of business. With regard to federal law, the Real Estate Settlement Procedures Act prohibits the giving or receiving of a “thing of value” in exchange for the referral of a settlement service business. Real estate agents and title agents are both providers of settlement services. A “thing of value” is very broadly defined and would include paying for a real estate agent’s promotional materials or advertising expenses. The Ohio laws that regulate title insurance agents also prohibit such payments. So, not only are cash payments for referrals prohibited, but any type of payment for the referral of the services is prohibited.

Tags: legal, Legally Speaking