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

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?
05/04/2009   |   Category: Contracts ยป Finder's Fee   |   State: Oregon   |   #16546

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.