TREC Rules for Referrals



TREC Rules for Referrals:

Q:
Can a license holder offer or pay cash to an unlicensed person for referring a potential lessee or buyer?

A: No. The person who made the referral and received cash would be considered an unlicensed person engaged in the business of real estate brokerage [TRELA §1101.351(a)] and could be subject to administrative penalties and criminal charges. The license holder who offers to or actually pays cash to an unlicensed person for a referral is subject to disciplinary action. [TRELA §1101.652(b)(11) & (26)] However, a license holder may compensate an unlicensed person from a foreign country or state that does not require a license to engage in real estate brokerage activities, if the person otherwise complies with the law of the foreign country and practices there as a real estate broker. [Rule 535.131(b)]

Q: Can a license holder offer to give a $50 gift card to an unlicensed person for referring a potential lessee or buyer?

A: Although a license holder may not pay an unlicensed person valuable consideration for referring a potential lessee or buyer, gifts of merchandise with a retail value of $50 or less are not considered valuable consideration. [Rule 535.20(a)] Therefore, a $50 gift card that is only redeemable for certain merchandise (e.g. a gift card to a restaurant or department store) is not defined as valuable consideration and is permissible. A gift card from a bank (e.g. Visa or American Express), however, which can be converted to cash is not permissible. Any amount of cash or a credit or bonus toward rent owed is also not allowed as a reward for a referral.