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.”