In California you must be licensed to receive a referral fee. If you have a sales license the commission goes to your broker, if you are inactive and do not have a broker you would not get a referral fee.
As an example ... Say an agent writes a fully executed sales contract on a pre-development condo that is not scheduled for completion/closing for two more years. Should that agent's license become inactive within that two year lag, the sales commission may (should) still be paid to the procuring agent by the employing broker under which the sales contract was written.
We see this issue debated often in the case of referrals, in which case the same rationale applies. A referral generated by an actively licensed agent can trigger a commission payment to that inactive licensee should that licensee become inactive before the referral comes to fruition and results in a closing/commission.
For an overview, Inactive Agents place their license with a LIFRO broker, and can keep their license active, no desk fees, or MLS fees, NO EMO's, but you can only refer business to other agents, you CAN NOT list or SELL Property and you MAY NOT enter into any agency agreementsÂ with sellers or buyers or directly represent clients.Â You canÂ refer leads through a full-service existing estate brokerage firms who perform the actual legitimate estate services. Everyone wins. With our company you can build a team of LIFRO agents, and you can build that business locally or all over the US.