After-the-fact referral fees are the main issue being addressed by a new coalition called the Real Estate Coalition for Cooperative Business Practices, formed by concerned members of the Employee Relocation Council (ERC.)

The Coalition created a relationship with the Association of Real Estate Licensing Law Officials (ARELLO) which has led to a mutual agreement of proper business procedure: the Policy Statement on the Collection of Real Estate Referral Fees.

ARELLO representative Sandy Taraszki of Howard Hanna Real Estate said, "A successful referral fee policy should be based upon the assumption that certain business procedures have been followed which create an enforceable obligation for the payment of referral fees. ARELLO and the Coalition have managed to create this effective policy, with which hundreds of Coalition members have already pledged to comply. And the Coalition should be commended for further enhancing this effort by creating the ‘Interchange’ in a proactive move to provide its constituents with a forum to resolve referral fee issues.”

Because the payment of referral fees has traditionally not been guided by consistent standards of business practice, discrepancies in determining the origin or existence of a referral fee agreement occur. To address the referral fee issue, the The Coalition's Interchange was created to facilitate the communication of after-the-fact referral fee concerns and the collection of information that will aid in the Coalition's efforts. Through the Interchange, it is possible to ensure swift and equitable problem resolution by bringing the issue to the attention of the appropriate executive from relocation service firms.

Pamela J. O'Connor, SCRP, president & CEO of RELO, the largest national real estate network for independent brokers said, "We have found that our member firms have been successful in securing waivers of after-the-fact referral fees by referencing the Coalition's policy statement to relocation companies who have attempted to charge such fees. In fact, the policy statement is so effective that referring to it has so far pre-empted our members' need to use the Interchange, though I believe the very existence of such a forum is highly effective in eliminating occurrences of unfair practices. No one wants to be spotlighted for practices which the industry has identified as being inappropriate."

“I think the absolute worst thing that happens in the relocation industry is when a transferee is pulled into one of these referral fee issues, which is exactly the opposite of our collective goal - to minimize the transferee's stress and inconvenience. From the real estate broker's perspective, the Interchange provides an opportunity to be heard, and to have disputes resolved fairly and on the basis of the facts. Any time an open forum for communication is established and utilized by all parties to a dispute, the chance of reaching a mutually acceptable resolution increases enormously, giving us all greater faith in ‘the system’,” said Sheila Barr, director, marketing & relocation, Patterson-Schwartz Real Estate

For information on the Coalition and the Interchange, visit the Coalition’s Web site at http://coalition.erc.org. This will allow users to access the Interchange and download the Coalition’s pledge and other communication about the Coalition’s efforts. To learn about the Employee Relocation Council, visit its Web site at www.erc.org or call 202/857-0857.

Published: April 20, 2000

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