Sharing Commissions with Unlicensed Persons in Texas

Texas real estate license law is extremely strict regarding who can receive commissions and referral fees. This is a highly tested consumer protection rule.

Why the Correct Option is Right

Option B is correct because TRELA explicitly prohibits paying a commission or referral fee to an unlicensed person for any activity requiring a license. Sharing commission is treated as a major violation of licensing law.

Why the Other Options are Traps

• Option A is a trap because familial relationships do not exempt a person from license laws.
• Option C is a trap because there is no dollar-amount exception for referrals. A license holder may give a gift worth up to $50 (not cash or cash equivalents) to an unlicensed person as a thank-you, but it cannot be a referral fee tied to a transaction.
• Option D is a trap because out-of-state attorneys are not authorized to practice real estate brokerage or receive referral fees in Texas unless they hold a Texas real estate license.

The Exam Trap

Watch out for the “gift card” vs “cash” trap. While you can give an unlicensed person a non-cash gift (like a restaurant gift card) up to $50 in value for a referral, you can NEVER give them cash, checks, or direct commission splits.

Worked Texas Example

Scenario: Jim refers his co-worker to Broker Amy. To thank Jim, Amy writes him a check for 10% of her earned commission ($1,200) after the deal closes. Outcome: Amy has committed a serious licensing violation by splitting a commission with an unlicensed individual. She faces suspension or revocation of her broker license under TRELA.