Referral Agreement (Broker-to-Broker) — Kentucky 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 Kentucky Edition: Every template was redrafted around the Kentucky real estate license law (KRS Chapter 324) and the Kentucky Real Estate Commission's agency disclosure regulation (201 KAR 11:121), under which licensees must deliver the Commission's agency disclosure form at first substantive contact and may act as a dual agent only with the informed written consent of both parties — so the dual agency consent in this set is a true consent instrument with the statutory disclosures spelled out. The seller disclosure edition tracks the Commission's required Seller's Disclosure of Property Condition regime, the listing and buyer agreements carry the written-agreement and definite-termination-date requirements Kentucky brokers are held to, the independent-contractor agreement reflects affiliation-through-the-principal-broker supervision, and every instrument recites the Kentucky Uniform Electronic Transactions Act and the Kentucky statute of frauds (KRS 371.010). Kentucky has no general broker commission lien statute, so the disbursement authorization relies on contractual escrow and closing-agent instructions rather than a lien claim. Not legal advice; have a Kentucky-licensed attorney review before use.