Darrel, Real Estate Pro in Los Angeles, CA

I refer clients to another agent for a commission - do I inure any liability if the transaction goes wrong ?

Asked by Darrel, Los Angeles, CA Tue Dec 17, 2013

I know this is bordering on legal, but maybe someone knows. I refer clients to another agent, if anything goes wrong errors and omissions, car accidents etc, do I have any liability ? I assume the RECIPIENT AGENT is working as an independent contractor.

Help the community by answering this question:

+ web reference
Web reference:


John Souerbry, Agent, Fairfield, CA
Tue Dec 17, 2013
Let's forget for a moment that I'm a broker.
If you referred me to another agent and the deal went south due to that agent's incompetence and you have more money than the agent you referred me to... I'd go after you with all guns blazing. I'd take your car, your home, your condo in Miami Beach, everything you own today and could ever own in the future - as long as the loss I sustained was deep enough to allow me to take all those things.
I don't care if you have E&O insurance, I will ask the court for quadruple whatever coverage you have.
The attractiveness of "deep pockets."
This is why I usually don't make referrals to other agents or to service providers.
1 vote
Randy Spaldi…, Agent, Los Angeles, CA
Tue Dec 17, 2013
Apparently you are an agent yourself and have your license currently with a broker. If you do not have your license hung with a broker, it would be illegal by state law for that agent to pay you any commission even if you do hold a license. You must have your license with a broker, and any commission paid must be paid to your broker, not to you directly. As mentioned in the prior response all liability would be on the recipient agent, not you or your broker. If you are with a broker, I'm wondering why you didn't ask your own broker rather than agents you don't know who may make shameless pitches for you to abandon the person who you've been working with. If you are not with a broker, hang your license with one before you make your next referral or you are putting your license and the other agents license in jeopardy. By the way you did not say the other agent was a Realtor. He may or may not be, and it isn't relevant. We are talking about state law, not National Association of Realtors rules.
1 vote
Emily Knell, Agent, Huntington Beach, CA
Tue Dec 17, 2013
When you refer a buyer or seller to another Realtor, you are NOT going to be the one who has any liability in the transaction. Only the agent who receives the referral is subject to liability in the way of disclosures, errors & omissions, etc.

If you are a real estate licensee, you would just sit back & let the other agent do the work & you would receive a previously agreed upon referral commission when the deal closes.

If you're nervous that you're going to refer a friend to an agent you have in mind. Maybe you'd like to just refer them to me. Read my profile, see that I've given over 1700 well thought out answers to consumers since approx. 2007 & I will take care of them.

Shoot me an email directly, or give me a call, I don't look back on this same Trulia posting for Replies or other answers posted after mine.

Emily S. Knell
562-430-3053 c
Realtor Since--- 1996
Realty ONE Group
BRE# 01211967
1 vote
Brad Korb, Agent, Burbank, CA
Sat Dec 21, 2013
I would think not,depending on what you told the client about this agent ,like he is awesome ,he will take great care of you etc. Anyone can sue anyone for any reason at all . Talk to your broker ,good luck !
0 votes
Shannon Chang, Agent, Arcadia, CA
Fri Dec 20, 2013
Typically, no. Only liability is from your client possibly not working with you and losing the client.
0 votes
Dorene Slavi…, Agent, Torrance, CA
Wed Dec 18, 2013
Dear Darrel,
I believe the recipient is liable only. However, this is getting into a legal gray area. I would call your company's legal division and have a consultation to be sure.
0 votes
Thomas Moser, Agent, East Northport, NY
Wed Dec 18, 2013
You very well could. The fact is that when someone starts suing, they sue everyone in sight.
0 votes
Lance King, Agent, San Francisco, CA
Wed Dec 18, 2013
Anyone can sue anyone else for anything at any time, and regardless of how stupid you still have to defend yourself.

The only reason I can think of that you would actually get a judgement against you is if you knew the referred agent to be unethical or something like that.
0 votes
Cindy Davis, Agent, San Diego, CA
Wed Dec 18, 2013
Many different opinions here....As a Realtor, we are always at risk and a target for lawsuits, right or wrong. If there is paperwork connecting you and another agent,...and there is a serious problem, then you probably can get drawn it.

Best solution? Discuss with your attorney and broker the best ways to reduce your liability.

Best of luck.
0 votes
Phil Rotondo, Agent, Melbourne, FL
Wed Dec 18, 2013
It depends on what goes wrong .
0 votes
Marge Bennett, Agent, Fort Myers, FL
Wed Dec 18, 2013
That's why we pay e&o insurance on referrals too.
0 votes
Mack McCoy, Agent, Seattle, WA
Tue Dec 17, 2013
ANY? We couldn't guarantee that. If the damage was big enough, you wouldn't get harassed by a lawyer, but I don''t worry about it.
0 votes
Walter 'Skip'…, Agent, Brea, CA
Tue Dec 17, 2013
In my opinion you would have no liability.
Good luck,
0 votes
Search Advice
Ask our community a question

Email me when…

Learn more