Title and Insurance referral fee?

Question

I just became a new commercial agent, and I have a couple of questions. My brother is a title officer and a friend of mine is an independent insurance agent. Can I refer them to my commercial clients and collect a fee? I know I cannot do it for residential (RESPA), but I wasn't sure about commercial buildings. This is for Central New Jersey and Pennsylvania.

Thank you.

Shawn Mcenteer · Answer

Much easier to getting paid on the lending side legally.  I am part of a program where I legally can get paid out on loan origination, its completely RESPA compliant and best part is requires very little additional work to add a huge value to my clients on the buy and sell side of deals.  My understanding with title is realtors cannot get paid unless they are title rep and they are not representing client on same deals collecting on both fronts. I know with lending its a matter of signing disclosure, perhaps title is similar but pretty sure you cant represent both.

Owen Rosen · Answer

On the insurance side typically there is a maximum (usually very nominal) amount that can be paid to anyone that isn't licensed.  Residential/commercial not a factor.

Liron Cohen · Answer

RESPA would not apply to you for certain commercial/business purpose loans, so no issues with referral fees regarding that. However, it's not usually worth it for insurance agents to hand out referral payments, and even if there's enough meat on the bone on certain policies, there are often laws against it on the insurance side. Here in CA we are not allowed to do it unless you are also a licensed insurance agent, but I've never heard of anyone who actually does.