I can remember the first time I heard of this practice and having my response include a â€œhigh-qualityâ€ expletive ;-)
Hereâ€™s the good news:
Since you are a CA RealtorÂ® answers to questions like this can often be found at the CAR Legal website once you log in.
Here are a two links with extracted key quotes to review regarding your question:
"BROKER LIABLE FOR CHARGING UNEARNED FEE"
Commentary that covers a decision of a federal district court in Alabama [Busby v. JRHBW Realty, Inc.].
"This decision serves as a good reminder for REALTORSÂ® to refrain from charging unearned fees under RESPA."
"HUD LETTER ALLOWS PERCENTAGE PLUS FLAT FEE COMMISSION"
Commentary that covers a letter from HUD's General Counsel Helen Kanovsky that clarifies the distinction between using a formula to calculate a legitimate commission, as opposed to an unearned fee that violates RESPA.
"As an example, a listing broker charging the buyer an administrative fee absent any contractual relationship between the listing broker and buyer may be evidence of a RESPA violation."
Finally, you can also call the CAR Legal Hotline and speak with a lawyer regarding your situation for FREE!
I am with Coldwell Banker (owned by NRT) and they stopped the practice of collecting this fee a couple of years ago. If this is a branch owned by NRT I would contact the manager to discuss this. If this is a Franchise branch (independently owned) I'm not sure what the policy is. Your client should not have to pay this fee if they don't want to. Ask the other agent to cover it since it is his/her brokerage charging it.
You should address this issue to the DRE for bad business code practice.