Referral Agreement (Broker-to-Broker) — Massachusetts 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 Massachusetts Edition: the template and its drafting notes are adapted for Massachusetts practice under M.G.L. c. 112, §§ 87PP–87DDD½ and the Board of Registration of Real Estate Brokers and Salespersons regulations at 254 CMR, including the Mandatory Licensee-Consumer Relationship Disclosure under 254 CMR 3.00. Massachusetts permits dual agency and designated agency only with informed written consent, so the consent document in this edition offers both elections. Massachusetts is a caveat emptor state with no statutory seller property-condition form; this edition's Seller Property Condition Disclosure is therefore drafted as a voluntary disclosure that reduces M.G.L. c. 93A exposure and is designed to sit alongside the Commonwealth's Property Transfer Lead Paint Notification, Title 5 septic inspection report, and smoke/CO detector certificate. The Independent Contractor Agreement is built around M.G.L. c. 112, § 87RR, which expressly permits salesperson affiliation as an independent contractor notwithstanding the c. 149, § 148B ABC test. Electronic signatures are addressed under the Massachusetts Uniform Electronic Transactions Act, M.G.L. c. 110G. Not legal advice; have a Massachusetts-licensed attorney review before use.