Can I legally receive a finder's fee for locating a property for someone to purchase?

05/04/2009 - Category:Contracts - Finder's Fee - State: OR #16546

Full Question:

Hello, I have a friend that has asked me to find her a ranch that will run 300 pair of cattle. I have been like a personal shopper for 2 years and I finally found a ranch. She now wants to pay me a finders fee. I will not be doing any of the paper work on the deal a real Estate lawyer will be doing all of that. Can I legally recieve this finder fee?

Answer:

A finder's fee is a fee paid to someone who acts as an intermediary for another party in a transaction. Finder's fees may be offered in a variety of situations. For example, an employer may pay a finder's fee to a recruitment agency upon hiring a new employee referred by that agency. A finder's fee may be paid regardless of whether a transaction is ultimately consumated.

A finder's fee is a fee paid to someone who acts as an intermediary for another party in a transaction. Finder's fees may be offered in a variety of situations. For example, an employer may pay a finder's fee to a recruitment agency upon hiring a new employee referred by that agency. A finder's fee may be paid regardless of whether a transaction is ultimately consumated.

In a real estate context, a finder's fee may be paid for locating property, obtaining mortgage financing, or referring sellers or buyers. A finder's fee is money paid to a person for finding someone interested in selling or buying property. To conduct any negotiations of sale terms, the finder may be required to be a licensed broker or he violates the law. However, state laws, which vary by state, may also provide an exemption for certain individuals, allowing them to be compensated without the necessity of licensure. For example, one state's law allows an exemption for either a property management firm or an owner of an apartment complex to pay a finder’s fee or referral of up to $50 to a current tenant for referring a new tenant. The fee can be in the form of cash, a rental reduction or some other thing of value. The party claiming compensation under this exemption is not allowed to advertise for prospective tenants.

Please see the following are OR statutes related to real estate broker licensing to determine applicability:

696.020 License required for individuals engaged in professional real estate activities; exception; rules.
(1) The Real Estate Agency may issue a real estate license only to an individual.
(2) An individual may not engage in, carry on, advertise or purport to engage in or carry on professional real estate activity, or act in the capacity of a real estate licensee, within this state unless the individual holds an active license as provided for in this chapter.
(3) A real estate licensee is bound by and subject to the requirements of ORS 696.010 to 696.495, 696.600 to 696.785, 696.800 to 696.870, 696.990 and 696.995 while:
(a) Engaging in professional real estate activity; or
(b) Acting on the licensee's own behalf in the sale, exchange, lease option or purchase of real estate or in the offer or negotiations for the sale, exchange, lease option or purchase of real estate.
(4) The agency by rule may establish provisions for a nonlicensed individual whose license is inactive or suspended and who acts on the licensee's own behalf in the sale, exchange, lease option or purchase of real estate or in the offer or negotiations for the sale, exchange, lease option or purchase of real estate.
696.030 Exemptions.
(1) ORS 696.010 to 696.375, 696.392, 696.395 to 696.430, 696.490, 696.600 to 696.785, 696.990 and 696.995 do not apply to:
(a) A nonlicensed individual who is a full-time employee of a single owner of real estate whose real estate activity involves the real estate of the employer and:
(A) Is incidental to the employee's normal, nonreal estate activities; or
(B) Is the employee's principal activity, but the employer's principal activity or business is not the sale, exchange, lease option or acquisition of real estate.
(b) A nonlicensed individual who acts as attorney in fact under a duly executed power of attorney from the owner or purchaser authorizing the supervision of the closing of or supervision of the performance of a contract for the sale, leasing or exchanging of real estate if the power of attorney was executed prior to July 1, 2002, in compliance with the requirements of law at the time of execution or if:
(A) The power of attorney is recorded in the office of the recording officer for the county in which the real estate is located;
(B) The power of attorney specifically describes the real estate; and
(C) The individual does not use the power of attorney as a device to engage in professional real estate activity without obtaining the necessary real estate license.
(c) A nonlicensed individual who acts as attorney in fact under a duly executed power of attorney in which the authorized agent is the spouse of the principal, or the child, grandchild, parent, grandparent, sibling, aunt, uncle, niece or nephew of the principal or of the spouse of the principal, authorizing real estate activity if the power of attorney is recorded in the office of the recording officer for the county in which the real estate to be sold, leased or exchanged is located.
(d) A nonlicensed individual who is an attorney at law rendering services in the performance of duties as an attorney at law.
(e) A nonlicensed individual who acts in the individual's official capacity as a receiver, a conservator, a trustee in bankruptcy, a personal representative or a trustee, or a regular salaried employee of the trustee, acting under a trust agreement, deed of trust or will.
(f) A nonlicensed individual who performs an act of professional real estate activity under order of a court.
(g) A nonlicensed individual who is a regular full-time employee of a single corporation, partnership, association or nonlicensed individual owner of real property acting for the corporation, partnership, association or nonlicensed individual owner in the rental or management of the real property, but not in the sale, exchange, lease option or purchase of the real property.
(h) An individual who is a registered professional engineer or architect rendering services in performance of duties as a professional engineer or architect.
(i) A nonlicensed individual who is employed by a real estate broker or principal real estate broker and who acts as a manager for real estate if the real estate activity of the nonlicensed individual is limited to negotiating rental or lease agreements, checking tenant and credit references, physically maintaining the real estate, conducting tenant relations, collecting the rent, supervising the premises managers and discussing financial matters relating to management of the real estate with the owner.
(j) An individual who sells or leases cemetery lots, parcels or units while engaged in the disposition of human bodies under ORS 97.010 to 97.040, 97.110 to 97.450, 97.510 to 97.730, 97.810 to 97.920 and 97.990 or an employee of the nonlicensed individual performing similar activities.
(k) An individual who is a salaried employee of the State of Oregon, or any of its political subdivisions, engaging in professional real estate activity as a part of such employment.
(L) A nonlicensed individual who analyzes or provides advice regarding permissible land use alternatives, environmental impact, building and use permit procedures or demographic market studies, or a regular full-time employee of the nonlicensed individual performing similar activities. This exclusion does not apply to the handling of transactional negotiations for transfer of an interest in real estate.
(m) An individual who is a hotelkeeper or innkeeper as defined by ORS 699.005 arranging the rental of transient lodging at a hotel or inn in the course of business as a hotelkeeper or innkeeper.
(n) An individual who is a travel agent arranging the rental of transient lodging at a hotel or inn as defined in ORS 699.005 in the course of business as a travel agent for compensation. For the purpose of this paragraph, "travel agent" means a person, and employees of the person, regularly representing and selling travel services to the public directly or indirectly through other travel agents.
(o) An individual who is a common carrier arranging the rental of transient lodging at a hotel or inn as defined in ORS 699.005 in the course of business as a common carrier. For the purpose of this paragraph, "common carrier" means a person that transports or purports to be willing to transport individuals from place to place by rail, motor vehicle, boat or aircraft for hire, compensation or consideration.
(p) An individual who is a hotel representative arranging the rental of transient lodging at a hotel or inn as defined in ORS 699.005 in the course of business as a hotel representative. For the purpose of this paragraph, "hotel representative" means a person that provides reservations or sale services to independent hotels, airlines, steamship companies and government tourist agencies.
(q) A nonlicensed individual transferring or acquiring an interest in real estate owned or to be owned by the individual.
(r) An individual who is a general partner for a domestic or foreign limited partnership duly registered and operating within this state under ORS chapter 70 engaging in the sale of limited partnership interests and the acquisition, sale, exchange, lease, transfer or management of the real estate of the limited partnership.
(s) An individual who is a membership camping contract broker or salesperson registered with the Real Estate Agency selling membership camping contracts.
(t) An individual who is a professional forester or farm manager engaging in property management activity on forestland or farmland when the activity is incidental to the nonreal estate duties involving overall management of forest or farm resources.
(u) An individual who is a registered investment adviser under the Investment Advisers Act of 1940, 15 U.S.C. § 80b-l et seq., rendering real estate investment services for the office of the State Treasurer or the Oregon Investment Council.
(v) A nonlicensed individual who refers a new tenant for compensation to a real estate licensee acting as the property manager for a residential building or facility while the individual resides in the building or facility or within six months after termination of the individual's tenancy.
(w) A nonlicensed individual who gives an opinion in an administrative or judicial proceeding regarding the value of real estate for taxation or representing a taxpayer under ORS 305.230 or 309.100.
(x) A nonlicensed individual acting as a paid fiduciary whose real estate activity is limited to negotiating or closing a transaction to obtain the services of a real estate licensee.
(y) A nonlicensed individual who is a fiduciary under a court order, without regard to whether the court order specifically authorizes real estate activity.
(z) An individual who is a representative of a financial institution or trust company, as those terms are defined in ORS 706.008, that is attorney in fact under a duly executed power of attorney from the owner or purchaser authorizing real estate activity, if the power of attorney is recorded in the office of the county clerk for the county in which the real estate to be sold, leased or exchanged is located.
(2) The vesting of title to real estate in more than one person by tenancy by the entirety, tenancy in common or by survivorship shall be construed as that of a single owner for the purposes of this section.
696.040 Single act sufficient to constitute professional real estate activity.
One act or transaction of professional real estate activity is sufficient to constitute engaging in professional real estate activity, within the meaning of this chapter.
696.290 Sharing compensation with or paying finder's fee to unlicensed person prohibited; exceptions.
(1) A real estate licensee shall not offer, promise, allow, give, pay or rebate, directly or indirectly, any part or share of the licensee's compensation arising or accruing from any real estate transaction or pay a finder's fee to any person who is not a real estate licensee licensed under ORS 696.022. However, a real estate broker or principal real estate broker may pay a finder's fee or a share of the licensee's compensation on a cooperative sale when the payment is made to a licensed real estate broker in another state or country, provided that the state or country in which that broker is licensed has a law permitting real estate brokers to cooperate with real estate brokers or principal real estate brokers in this state and that such nonresident real estate broker does not conduct in this state any acts constituting professional real estate activity and for which compensation is paid. If a country does not license real estate brokers, the payee must be a citizen or resident of the country and represent that the payee is in the business of real estate brokerage in the other country. A real estate broker associated with a principal real estate broker shall not accept compensation from any person other than the principal real estate broker with whom the real estate broker is associated at the time. A principal real estate broker shall not make payment to the real estate broker of another principal real estate broker except through the principal real estate broker with whom the real estate broker is associated. Nothing in this section prevents payment of compensation earned by a real estate broker or principal real estate broker while licensed, because of change of affiliation or inactivation of the broker's license.
(2) Nothing in subsection (1) of this section is intended to prohibit a real estate licensee who has a written property management agreement with the owner of a residential building or facility from authorizing the payment of a referral fee, rent credit or other compensation to an existing tenant of the owner or licensee, or a former tenant if the former tenant resided in the building or facility within the previous six months, as compensation for referring new tenants to the licensee.
(3) Nothing in subsection (1) of this section is intended to prevent an Oregon real estate broker or principal real estate broker from sharing compensation on a cooperative nonresidential real estate transaction with a person who holds an active real estate license in another state or country, provided:
(a) Before the out-of-state real estate licensee performs any act in this state that constitutes professional real estate activity, the licensee and the cooperating Oregon real estate broker or principal real estate broker agree in writing that the acts constituting professional real estate activity conducted in this state will be under the supervision and control of the cooperating Oregon broker and will comply with all applicable Oregon laws;
(b) The cooperating Oregon real estate broker or principal real estate broker accompanies the out-of-state real estate licensee and the client during any property showings or negotiations conducted in this state; and
(c) All property showings and negotiations regarding nonresidential real estate located in this state are conducted under the supervision and control of the cooperating Oregon real estate broker or principal real estate broker.
(4) Nothing in subsection (1) of this section is intended to prohibit a real estate licensee from directly compensating a licensed personal assistant if permitted by the terms, conditions and requirements of a licensed personal assistant agreement under ORS 696.028.
(5) As used in subsection (3) of this section, "nonresidential real estate" means any real property that is improved or available for improvement by commercial structures or five or more residential dwelling units.
In a real estate context, a finder's fee may be paid for locating property, obtaining mortgage financing, or referring sellers or buyers. A finder's fee is money paid to a person for finding someone interested in selling or buying property. To conduct any negotiations of sale terms, the finder may be required to be a licensed broker or he violates the law. However, state laws, which vary by state, may also provide an exemption for certain individuals, allowing them to be compensated without the necessity of licensure. For example, one state's law allows an exemption for either a property management firm or an owner of an apartment complex to pay a finder’s fee or referral of up to $50 to a current tenant for referring a new tenant. The fee can be in the form of cash, a rental reduction or some other thing of value. The party claiming compensation under this exemption is not allowed to advertise for prospective tenants. Please see the following are OR statutes related to real estate broker licensing to determine applicability: 696.020 License required for individuals engaged in professional real estate activities; exception; rules. (1) The Real Estate Agency may issue a real estate license only to an individual. (2) An individual may not engage in, carry on, advertise or purport to engage in or carry on professional real estate activity, or act in the capacity of a real estate licensee, within this state unless the individual holds an active license as provided for in this chapter. (3) A real estate licensee is bound by and subject to the requirements of ORS 696.010 to 696.495, 696.600 to 696.785, 696.800 to 696.870, 696.990 and 696.995 while: (a) Engaging in professional real estate activity; or (b) Acting on the licensee's own behalf in the sale, exchange, lease option or purchase of real estate or in the offer or negotiations for the sale, exchange, lease option or purchase of real estate. (4) The agency by rule may establish provisions for a nonlicensed individual whose license is inactive or suspended and who acts on the licensee's own behalf in the sale, exchange, lease option or purchase of real estate or in the offer or negotiations for the sale, exchange, lease option or purchase of real estate. 696.030 Exemptions. (1) ORS 696.010 to 696.375, 696.392, 696.395 to 696.430, 696.490, 696.600 to 696.785, 696.990 and 696.995 do not apply to: (a) A nonlicensed individual who is a full-time employee of a single owner of real estate whose real estate activity involves the real estate of the employer and: (A) Is incidental to the employee's normal, nonreal estate activities; or (B) Is the employee's principal activity, but the employer's principal activity or business is not the sale, exchange, lease option or acquisition of real estate. (b) A nonlicensed individual who acts as attorney in fact under a duly executed power of attorney from the owner or purchaser authorizing the supervision of the closing of or supervision of the performance of a contract for the sale, leasing or exchanging of real estate if the power of attorney was executed prior to July 1, 2002, in compliance with the requirements of law at the time of execution or if: (A) The power of attorney is recorded in the office of the recording officer for the county in which the real estate is located; (B) The power of attorney specifically describes the real estate; and (C) The individual does not use the power of attorney as a device to engage in professional real estate activity without obtaining the necessary real estate license. (c) A nonlicensed individual who acts as attorney in fact under a duly executed power of attorney in which the authorized agent is the spouse of the principal, or the child, grandchild, parent, grandparent, sibling, aunt, uncle, niece or nephew of the principal or of the spouse of the principal, authorizing real estate activity if the power of attorney is recorded in the office of the recording officer for the county in which the real estate to be sold, leased or exchanged is located. (d) A nonlicensed individual who is an attorney at law rendering services in the performance of duties as an attorney at law. (e) A nonlicensed individual who acts in the individual's official capacity as a receiver, a conservator, a trustee in bankruptcy, a personal representative or a trustee, or a regular salaried employee of the trustee, acting under a trust agreement, deed of trust or will. (f) A nonlicensed individual who performs an act of professional real estate activity under order of a court. (g) A nonlicensed individual who is a regular full-time employee of a single corporation, partnership, association or nonlicensed individual owner of real property acting for the corporation, partnership, association or nonlicensed individual owner in the rental or management of the real property, but not in the sale, exchange, lease option or purchase of the real property. (h) An individual who is a registered professional engineer or architect rendering services in performance of duties as a professional engineer or architect. (i) A nonlicensed individual who is employed by a real estate broker or principal real estate broker and who acts as a manager for real estate if the real estate activity of the nonlicensed individual is limited to negotiating rental or lease agreements, checking tenant and credit references, physically maintaining the real estate, conducting tenant relations, collecting the rent, supervising the premises managers and discussing financial matters relating to management of the real estate with the owner. (j) An individual who sells or leases cemetery lots, parcels or units while engaged in the disposition of human bodies under ORS 97.010 to 97.040, 97.110 to 97.450, 97.510 to 97.730, 97.810 to 97.920 and 97.990 or an employee of the nonlicensed individual performing similar activities. (k) An individual who is a salaried employee of the State of Oregon, or any of its political subdivisions, engaging in professional real estate activity as a part of such employment. (L) A nonlicensed individual who analyzes or provides advice regarding permissible land use alternatives, environmental impact, building and use permit procedures or demographic market studies, or a regular full-time employee of the nonlicensed individual performing similar activities. This exclusion does not apply to the handling of transactional negotiations for transfer of an interest in real estate. (m) An individual who is a hotelkeeper or innkeeper as defined by ORS 699.005 arranging the rental of transient lodging at a hotel or inn in the course of business as a hotelkeeper or innkeeper. (n) An individual who is a travel agent arranging the rental of transient lodging at a hotel or inn as defined in ORS 699.005 in the course of business as a travel agent for compensation. For the purpose of this paragraph, "travel agent" means a person, and employees of the person, regularly representing and selling travel services to the public directly or indirectly through other travel agents. (o) An individual who is a common carrier arranging the rental of transient lodging at a hotel or inn as defined in ORS 699.005 in the course of business as a common carrier. For the purpose of this paragraph, "common carrier" means a person that transports or purports to be willing to transport individuals from place to place by rail, motor vehicle, boat or aircraft for hire, compensation or consideration. (p) An individual who is a hotel representative arranging the rental of transient lodging at a hotel or inn as defined in ORS 699.005 in the course of business as a hotel representative. For the purpose of this paragraph, "hotel representative" means a person that provides reservations or sale services to independent hotels, airlines, steamship companies and government tourist agencies. (q) A nonlicensed individual transferring or acquiring an interest in real estate owned or to be owned by the individual. (r) An individual who is a general partner for a domestic or foreign limited partnership duly registered and operating within this state under ORS chapter 70 engaging in the sale of limited partnership interests and the acquisition, sale, exchange, lease, transfer or management of the real estate of the limited partnership. (s) An individual who is a membership camping contract broker or salesperson registered with the Real Estate Agency selling membership camping contracts. (t) An individual who is a professional forester or farm manager engaging in property management activity on forestland or farmland when the activity is incidental to the nonreal estate duties involving overall management of forest or farm resources. (u) An individual who is a registered investment adviser under the Investment Advisers Act of 1940, 15 U.S.C. § 80b-l et seq., rendering real estate investment services for the office of the State Treasurer or the Oregon Investment Council. (v) A nonlicensed individual who refers a new tenant for compensation to a real estate licensee acting as the property manager for a residential building or facility while the individual resides in the building or facility or within six months after termination of the individual's tenancy. (w) A nonlicensed individual who gives an opinion in an administrative or judicial proceeding regarding the value of real estate for taxation or representing a taxpayer under ORS 305.230 or 309.100. (x) A nonlicensed individual acting as a paid fiduciary whose real estate activity is limited to negotiating or closing a transaction to obtain the services of a real estate licensee. (y) A nonlicensed individual who is a fiduciary under a court order, without regard to whether the court order specifically authorizes real estate activity. (z) An individual who is a representative of a financial institution or trust company, as those terms are defined in ORS 706.008, that is attorney in fact under a duly executed power of attorney from the owner or purchaser authorizing real estate activity, if the power of attorney is recorded in the office of the county clerk for the county in which the real estate to be sold, leased or exchanged is located. (2) The vesting of title to real estate in more than one person by tenancy by the entirety, tenancy in common or by survivorship shall be construed as that of a single owner for the purposes of this section. 696.040 Single act sufficient to constitute professional real estate activity. One act or transaction of professional real estate activity is sufficient to constitute engaging in professional real estate activity, within the meaning of this chapter. 696.290 Sharing compensation with or paying finder's fee to unlicensed person prohibited; exceptions. (1) A real estate licensee shall not offer, promise, allow, give, pay or rebate, directly or indirectly, any part or share of the licensee's compensation arising or accruing from any real estate transaction or pay a finder's fee to any person who is not a real estate licensee licensed under ORS 696.022. However, a real estate broker or principal real estate broker may pay a finder's fee or a share of the licensee's compensation on a cooperative sale when the payment is made to a licensed real estate broker in another state or country, provided that the state or country in which that broker is licensed has a law permitting real estate brokers to cooperate with real estate brokers or principal real estate brokers in this state and that such nonresident real estate broker does not conduct in this state any acts constituting professional real estate activity and for which compensation is paid. If a country does not license real estate brokers, the payee must be a citizen or resident of the country and represent that the payee is in the business of real estate brokerage in the other country. A real estate broker associated with a principal real estate broker shall not accept compensation from any person other than the principal real estate broker with whom the real estate broker is associated at the time. A principal real estate broker shall not make payment to the real estate broker of another principal real estate broker except through the principal real estate broker with whom the real estate broker is associated. Nothing in this section prevents payment of compensation earned by a real estate broker or principal real estate broker while licensed, because of change of affiliation or inactivation of the broker's license. (2) Nothing in subsection (1) of this section is intended to prohibit a real estate licensee who has a written property management agreement with the owner of a residential building or facility from authorizing the payment of a referral fee, rent credit or other compensation to an existing tenant of the owner or licensee, or a former tenant if the former tenant resided in the building or facility within the previous six months, as compensation for referring new tenants to the licensee. (3) Nothing in subsection (1) of this section is intended to prevent an Oregon real estate broker or principal real estate broker from sharing compensation on a cooperative nonresidential real estate transaction with a person who holds an active real estate license in another state or country, provided: (a) Before the out-of-state real estate licensee performs any act in this state that constitutes professional real estate activity, the licensee and the cooperating Oregon real estate broker or principal real estate broker agree in writing that the acts constituting professional real estate activity conducted in this state will be under the supervision and control of the cooperating Oregon broker and will comply with all applicable Oregon laws; (b) The cooperating Oregon real estate broker or principal real estate broker accompanies the out-of-state real estate licensee and the client during any property showings or negotiations conducted in this state; and (c) All property showings and negotiations regarding nonresidential real estate located in this state are conducted under the supervision and control of the cooperating Oregon real estate broker or principal real estate broker. (4) Nothing in subsection (1) of this section is intended to prohibit a real estate licensee from directly compensating a licensed personal assistant if permitted by the terms, conditions and requirements of a licensed personal assistant agreement under ORS 696.028. (5) As used in subsection (3) of this section, "nonresidential real estate" means any real property that is improved or available for improvement by commercial structures or five or more residential dwelling units.

Please see the information at the following links:

http://definitions.uslegal.com/b/business-brokers/ http://definitions.uslegal.com/b/brokers/

Please see the forms at the following links:

http://www.uslegalforms.com/us/US-01698-AZ.htm http://www.uslegalforms.com/us/US-01698-AZ.htm

05/04/2009 - Category: Finder's Fee - State: OR #16546

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