Real Estate Employee Referral Incentive Programs
by Mary Beth Guard, BOL Guru
Question: Our bank is looking to increase its portfolio in the real estate market. Is it possible to do an incentive referral program with our employees? The idea would be that the employee with the most referrals between certain dates wins a trip.
Answer: HUD's Regulation X (which implements RESPA) states in Section 3500.14((g) that a payment by an employer to its own bona fide employee for generating business for that employer is permissible. Whether you pay a fixed fee, or have an incentive referral program that awards a prize to the employee with the most referrals, it would appear to be permissible under RESPA.
The original version appeared in the January/February 2003 edition of the Oklahoma Bankers Association Compliance Informer.
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