Section 230-RICR-30-20-2.21 - CommissionsA. Unless otherwise expressly provided by written agreement between the principal broker and an affiliated licensee and cooperating broker and referring broker, all commissions due to a licensee from the principal broker shall be subject to an accounting and payment to the affiliated licensee and cooperating broker and referring broker no later than ten (10) calendar days from the receipt of such commission by the principal broker.B. Every principal broker must promulgate a written policy for the payment of commissions to affiliated licensees upon their termination. Such policy must prescribe the rate of commission to be paid, if any, on termination. The principal broker must obtain the written signature of each affiliated licensee under such principal broker as soon as such affiliation is established to indicate that the affiliated licensee agrees to the policy. The policy shall include, but not be limited to, the following:1. Upon termination of affiliation or employment, the principal broker shall make a complete accounting in writing of all commissions due to licensee;2. In the event any commission so accounted for is not in accord with the established commission schedule, the principal broker shall give a complete written explanation of any difference; and3. Such accounting shall be made within thirty (30) days after the termination of affiliation or employment of the licensee.C. In the event the seller offers an incentive payment beyond the agreed listing fee to the procuring licensee, the principal broker and the seller must have a written agreement describing the incentive payment and recognizing that if the sale is a cooperative sale, the incentive payment must be in conformity with R.I. Gen. Laws § 5-20.5-14(12) and must be distributed to the licensee by the principal broker with whom he or she is affiliated.D. An affiliated licensee of a principal broker may create a wholly owned corporation or limited liability company for the purpose of receiving commission payments from the principal broker. A corporation or limited liability company created for the purposes of § 2.21(D) of this Part may not be licensed or conduct licensed real estate activity in its own name. Any such entity may not have more than one (1) shareholder in the case of a corporation or more than one (1) member in the case of a limited liability company.(1) However, a Team leader may form a separate single-member/manager limited liability company only for the purposes of collecting funds from Team members to pay common joint expenses, such as unlicensed administrative staff, rent, utilities and other common expenses.E. A principal broker may pay the earned commission of an affiliated licensee to that person's wholly owned corporation or limited liability company. To do so, the affiliated licensee must submit written instructions to the principal broker directing him or her to pay the affiliated licensee's share of the commission to the wholly owned corporation or limited liability company. It is the principal broker's obligation to assure that the corporation or limited liability company is solely owned by the affiliated licensee.F. The Principal Broker shall not pay commissions to a Team but shall pay each individual Licensee under their supervision their portion of the commission. Payment to team members shall be made to each individual licensee personally, or to each individual licensee's wholly-owned corporation or limited liability company as permitted by §§ 2.21(D) amp; (E) of this Part.G. In any real estate transaction, a licensee shall at the first (1st) point of personal contact, but no later than making an offer to purchase, disclose in writing whether the licensee has any of the following interests in the transaction: 1. An ownership interest in the property being sold (regardless of the percentage or type of ownership, i.e. individual, corporate, trust, etc.);2. Will be purchasing any portion of the property being sold (regardless of the percentage of potential ownership, i.e. individual, corporate, trust, etc.);3. A business interest (ownership or otherwise) in a business entity that is a buyer or seller;4. Is a representative of a family member, which includes any person who is related to the licensee, whether by blood, marriage or adoption, as any of the following: spouse, father, step-father, father-in-law, mother, stepmother, mother-in-law, son, step-son, son-in-law, daughter, step-daughter, daughter-in-law, brother, step-brother, brother-in-law, sister, step-sister, sister-in-law, grandfather, step-grandfather, grandfather-in-law, grandmother, step-grandmother, grandmother-in-law, grandson, step-grandson, grandson-in-law, granddaughter, step-granddaughter, granddaughter-in-law, uncle, step-uncle, uncle-in-law, aunt, step-aunt, aunt-in-law, niece, step-niece, niece-in-law, nephew, step-nephew, nephew-in-law, first cousin, step-first cousin and first-cousin-in-law; or5. Is a representative of a household member, which includes any person having legal residence or living in a licensee's place of residence.230 R.I. Code R. 230-RICR-30-20-2.21
Amended effective 11/27/2019
Amended effective 5/1/2021
Amended effective 2/21/2022