Iowa Code 543B.60A – Prohibited practices — business referral disclosures
Current as of: 2023 | Check for updates
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1. A licensee shall not request a referral fee after a bona fide offer to purchase is accepted.
Terms Used In Iowa Code 543B.60A
- Agency: means a relationship in which a real estate broker acts for or represents another by the other person's express authority in a transaction. See Iowa Code 543B.5
- Brokerage: means the business or occupation of a real estate broker. See Iowa Code 543B.5
- Fiduciary: A trustee, executor, or administrator.
- following: when used by way of reference to a chapter or other part of a statute mean the next preceding or next following chapter or other part. See Iowa Code 4.1
- Licensee: means a broker or a salesperson licensed pursuant to this chapter. See Iowa Code 543B.5
- Listing: is a n agreement between a property owner and another person in which that person holds or advertises the property to the public as being available for sale or lease. See Iowa Code 543B.5
- Person: means an individual, partnership, association, corporation, professional corporation, or professional limited liability company. See Iowa Code 543B.5
- real estate: means real property wherever situated, and includes any and all leaseholds or any other interest or estate in land, and business opportunities which involve any interest in real property. See Iowa Code 543B.4
- state: when applied to the different parts of the United States, includes the District of Columbia and the territories, and the words "United States" may include the said district and territories. See Iowa Code 4.1
- Transaction: means the sale, exchange, purchase, or rental of, or the granting or acceptance of an option to sell, exchange, purchase, or rent an interest in real estate. See Iowa Code 543B.5
2. A licensee shall not request a referral fee after a bona fide listing agreement has been signed.
3. A licensee shall not offer, promote, perform, provide, or otherwise participate in any marketing plan that requires a consumer to receive brokerage services, including referral services, from two or more licensees in a single real estate transaction, as a required condition for the consumer to receive either of the following:
a. Brokerage services from one or more of such licensees.
b. A rebate, prize, or other inducement from one or more such licensees.
4. For purposes of this section, “consumer” shall include parties or prospective parties to a real estate transaction, clients or prospective clients of a licensee, or customers or prospective customers of a licensee.
5. This section does not address relationships between a broker and the broker associates or salespersons licensed under, employed by, or otherwise associated with the broker in a real estate brokerage agency.
6. A violation of this section is deemed a violation of section 543B.29, subsection 1, paragraph “d”.
7. The purpose of this section is to prohibit licensee practices that interfere with contractual arrangements, place improper restrictions on consumer choice, compromise a licensee’s fiduciary obligations, and create conflicts of interest.
8. An Iowa licensee is prohibited from participating in any marketing plan or arrangement prohibited by this section with a person who is licensed or otherwise authorized to engage in the real estate business in another state or foreign country. This subsection shall not be interpreted to impact or alter a referral fee structure which otherwise complies with the requirements of this section.
9. A licensee or person licensed in another state or foreign country who conducts business in this state or refers business to a licensee in this state shall disclose in writing to the consumer and to the licensee to whom they are referring business, the name of the consumer being referred, the name of the referring company, and the amount of compensation they are receiving for the referral. This subsection shall not affect or restrict business practices relating to payment methods between listing and selling brokerages, and shall be applicable strictly to properties containing at least one but not more than four dwelling units.