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Legal FAQs for REALTORS® — Professional Standards

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Legal disclaimer

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? (updated August 4, 2016)

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.

Legal Disclaimer: The material provided here is for informational purposes only and is not intended and should not be considered as legal advice for your particular matter. You should contact your attorney to obtain advice with respect to any particular issue or problem. Applicability of the legal principles discussed in this material may differ substantially in individual situations.

While the Texas Association of REALTORS® has used reasonable efforts in collecting and preparing materials included here, due to the rapidly changing nature of the real estate marketplace and the law, and our reliance on information provided by outside sources, the Texas Association of REALTORS® makes no representation, warranty, or guarantee of the accuracy or reliability of any information provided here or elsewhere on Any legal or other information found here, on, or at other sites to which we link, should be verified before it is relied upon.

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