Referral Agreement (Broker-to-Broker) — Arkansas Edition Template

Referral fees are a core revenue stream in real estate — but they are legal only when paid between licensed brokers. Every state's license law prohibits paying referral fees to unlicensed persons, and in transactions involving a federally related mortgage loan, RESPA Section 8 (12 U.S.C. § 2607) prohibits kickbacks and unearned fee-splitting for settlement-service referrals — with an exemption at 12 U.S.C. § 2607(c) that permits cooperative brokerage and referral arrangements between licensed real estate agents and brokers. The practical rule: broker-to-broker referral fees are fine; anything else needs scrutiny. And because a referral fee is a commission-sharing promise, the statute of frauds in most states means an unwritten referral deal is an unenforceable handshake.

This 4-page Referral Agreement locks the arrangement down in writing: identification of referring broker and receiving broker (with license numbers and states), the referred client's identity and the scope of the referral (buy-side, sell-side, or both; geographic area; property types), the referral fee as a percentage of the receiving side's gross commission (or a flat amount), when the fee is earned and payable (at closing, out of escrowed commission), treatment of multiple transactions by the same referred client during a defined capture period, a no-brokerage-services acknowledgment by the referring broker in the destination transaction, status updates, and governing law.

The included notes cover interstate referrals (fee must generally be paid broker-to-broker through the licensee's own broker), states with specific referral disclosure requirements to clients, and the RESPA boundaries for anything touching settlement services beyond brokerage. Template for drafting purposes — not legal advice.

About this Arkansas Edition: Every template was redrafted around the Arkansas Real Estate License Law (Ark. Code Ann. Title 17, Chapter 42) and the Arkansas Real Estate Commission's agency regulations, under which dual agency is permitted only with the informed written consent of both parties and all compensation must flow through the principal broker. Because Arkansas has no mandatory statutory seller disclosure form, the disclosure templates are built as voluntary, actual-knowledge disclosures framed by Arkansas fraud and misrepresentation law, the Arkansas Deceptive Trade Practices Act (Ark. Code Ann. § 4-88-101 et seq.), and the licensee's regulatory duty to disclose known material defects. Writings are keyed to the Arkansas statute of frauds (Ark. Code Ann. § 4-59-101) and the Arkansas Uniform Electronic Transactions Act (Ark. Code Ann. § 25-32-101 et seq.), the broker lien statute is treated as limited to commercial real estate (Ark. Code Ann. Title 18, Chapter 44, Subchapter 3), and the independent contractor template references Arkansas's covenant-not-to-compete statute (Ark. Code Ann. § 4-75-101).