Question

Which one is considered unlawful compensation?

Selections

A. Agent received compensation directly from seller

B. Agent received compensation for consulting service provided to his friend on searching property

C. Agent received direct compensation in a sales transaction from a broker with whom agent has no employment relationship

D. None of the above

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Answer: C

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5 Keys Summary

• A real estate salesperson is legally required to be employed by and operate under the control and supervision of a licensed real estate broker.

• All compensation owed to a salesperson for services performed in a real estate transaction must be paid exclusively by their employing broker.

• Receiving direct compensation in a sales transaction from any broker or firm with whom the salesperson does not have an active employment relationship is considered unlawful compensation.

• This mandated structure ensures that the broker maintains required supervision and control over the salesperson’s activities and income flow, making payment from any other entity a violation.

• The commission check is typically paid to the employing broker first, who then pays the salesperson according to their agreed-upon commission split.

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