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Can a broker charge a fee without a party’s consent?

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A toy house and $1 bills on top of a blank contract

08/11/2016 | Author: TAR Legal Staff

A friend called me after his recent closing to ask about a transaction fee listed on his Closing Disclosure form. He says it was charged to him by the broker representing the other party. When he asked the broker about the fee, she said she always charges this fee to both sides of the transaction.

My friend didn’t know about or authorize this fee. Is the broker in violation of TREC rules or the Code of Ethics by charging this fee without his authorization?

According to the conduct described, that broker may have violated the Real Estate License Act. The act states that a broker is in violation of the Real Estate License Act if he or she receives compensation from more than one party to a transaction without full knowledge and consent of all parties.

Article 7 of the Code of Ethics also prohibits a REALTOR® from accepting compensation from more than one party to a transaction without disclosure to all parties and the informed consent of a REALTOR®'s client. The conduct described in this case may be a violation of Article 7, and it might also constitute a violation of Article 1, which requires that REALTORS® treat all parties honestly.

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Categories: Forms, Legal
Tags: legal, legal faq, fees, code of ethics

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