N.J.A.C. 11:5-7.2 — Prohibition against kickbacks for related business referrals

(a) A licensee who solicits or accepts any fee, kickback, compensation, or thing of value for referring a customer or client to a lender, mortgage broker, or other provider of related services, shall be subject to sanction for engaging in conduct demonstrating unworthiness, bad faith, and dishonesty. Any compensation received by a licensee, pursuant to N.J.A.C. 11:5-7.1(e), for services in related transactions must be for services actually performed by the licensee beyond mere referral. Compliance with the anti-kickback provisions of the Federal Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. § 2607, the regulations thereunder, or any opinion regarding RESPA issued by the Federal Department of Housing and Urban Development will be considered to be in compliance with this subsection. (b) Compensation paid by a broker to a salesperson (referral) shall be limited to compensation for referring prospective consumers of brokerage services to the broker. Brokers are prohibited from offering incentives to the salesperson (referral), salespersons, or broker-salespersons licensed under them for merely referring clients to a particular lender, mortgage broker, or other provider of related services. Compensation paid by a broker to a salesperson or broker-salesperson for services related to a sale or rental transaction must be for services actually performed by the salesperson beyond mere referral to a mortgage lender, mortgage broker, or other provider of related services. For example, a broker who provides in-house mortgage services may compensate a salesperson licensed with that broker who performs actual mortgage services. However, the broker is prohibited from offering bonuses or extra consideration of any kind to licensees of their firm for merely referring buyers to the in-house mortgage service or any particular lender or mortgage broker. For example, a broker shall not offer or pay a salesperson a higher commission rate on a real estate transaction because the mortgage is placed through the in-house mortgage service or affiliated lender. A broker shall not award prizes or bonuses to salespersons based upon the number of customer referrals made to the in-house mortgage service or to a particular lender.