The issue is Business and Professions Code section 10131 and Section 10137. Essentially, a licensed broker cannot pay a fee to a non-licensee to do something for which a real estate license is required. The court’s have addressed this (Shaffer v. Beinhorn (1923) 190 Cal. 569, 573-574, Tyrone v. Kelley (1973) 9 Cal.3d 1) and the California Attorney General in 1995 issued a favorable opinion on this issue. The scenario was: “The role of the finder … to enable the broker to identify and contact persons who may be interested in obtaining a loan through a secured transaction.” The simple answer, is merely providing a lead to a broker, but not doing any negotiating, or something that a license is required, allows the broker to pay a non-licensee a finder’s fee. (See 78 Ops. Cal. Gen. 71, https://oag.ca.gov/system/files/opinions/pdfs/94-909.pdf)

By the way, it is so easy to get a real estate license, unless the finder is barred from getting a license, make your life simple, take the exam!

Don’t forget, RESPA applies if its a buyer occupied residential property with 4 or fewer unitsstill may prohibit real estate licensees from paying – or providing – anything of value to a non-licensee for the referral for business if the referral was done with the expectation of gaining compensation and the transaction is “federally related.”

Here are some articles written by Michael Simkin, and his brilliant erudite daughter, about persuasive writing techniques attorney’s should use.

Persuasive Writing: Sentence Structure©
Persuasive Writing: Outlining Your Argument
Persuasive Writing: Paragraphing for Lawyers ©
Problematic Words: A Cheat Sheet

If you own or operate a for profit corporation, LLC, limited partnership or “any business entity that requires registration or creation by filing a form with any governmental entity, you need to go and file at https://boiefiling.fincen.gov  There are 23 categories of exemptions, general partnerships and trusts do not need to register.  Tax-exempt nonprofits are exempt from reporting ONLY if they have  a 501(c)(something) status and accounting firms.  This law applies to law firms, real estate brokers, restaurant owners, contractors, property managers, and any other type of company except those who are “inactive”.  The “inactive” category is going to be the interesting one to see how the law is enforced and what you need to show it is inactive.

Don’t fight it, just go to https://www.fincen.gov/boi and fill out the information requested or you may incur penalties of $500 per day plus $10,000 and two years in jail if not done within 90 days of forming a new entity after January 1, 2024 or will be penalized for companies formed before January 1, 2024 if not registered by January 1, 2025.