Referring and Receiving a Fee?

Understanding Referral Fees – What Every Agent Needs to Know

Referral fees are a common and accepted practice in real estate, but many agents don’t fully understand the legal and ethical requirements that come with them. If you're referring a client to another licensed professional and receiving compensation, there are important steps you must follow to remain compliant.

Key Requirements for Referral Fees in Alberta

Disclosure is Mandatory

You must disclose in writing that you are receiving a referral fee. This isn’t optional—it’s a regulatory requirement to ensure transparency and protect the consumer.

Use the Correct Referral Fee Consent Form

Our brokerage provides in-house referral consent forms that meet RECA’s requirements and are preferred for all referral arrangements. These forms are more flexible and practical than the AREA version, especially when dealing with unlicensed referrers. While the AREA form is available on WebForms and can be used for referrals between licensed professionals, it is not required if you're using our brokerage-approved templates.

We require using the correct form - CLIENT REFERRAL FEE CONSENT FORM For Referrals from a Licensed Individual

The Client Must Sign Before the Referral is Made

Consent must be obtained before the client is referred—not after. The client needs to understand what is happening with their information and that compensation is involved.

Include All Relevant Details

• Name of the referring agent and receiving agent/brokerage

• Referral fee amount or percentage (optional but recommended)

• Who is paying the fee

• The services involved

• What personal information will be shared

RECA does not require you to disclose the exact amount or method of calculating the referral fee, but doing so helps build transparency and prevents misunderstandings.

Maintain Proper Documentation

Always keep a signed copy of the consent form in the Broekrages and your transaction file. If RECA audits your records, this documentation is key for demonstrating compliance.

Only Share Client Information with Consent

You may only share personal client information after receiving their written consent. This supports your obligations under RECA's Rules related to confidentiality and data protection.

Working with Unlicensed Referrers

Referral fees can also be paid to unlicensed individuals, such as a past client but special care must be taken:

• The unlicensed party must not trade in real estate in any form (e.g., cannot give advice, interpret contracts, or negotiate terms).

• You must obtain the client’s written consent that includes:

  • The referrer’s name and their unlicensed status

  • An explanation that a referral fee will be paid

  • Confirmation that this does not affect the client's commission or obligations

  • The office will be required to issue a T4A to this person and all taxes must be considered. For this, Greater Calgary real estate will require their SIN number. The unlicensed referring person must realize this will be considered income with the CRA. Extra brokerage fees will apply to the unlicensed individual's fee deducted out of the referral fee prior to payout. 

We require using a separate form titled "Client Referral Fee Consent – Unlicensed Referrer", available from our brokerage, that outlines these elements clearly.

The referring individual should never receive personal transaction documents or client details beyond what is essential and consented to.

When to Use Which Referral Form

• If your brokerage is referring a client to another licensed associate (within or outside of Alberta), use our in-house referral agreement form to outline the agreement, fee structure, and client details.

• The receiving agent or their brokerage may use their own referral form for their internal compliance, which is completely acceptable.

• Always ensure the client signs a referral consent form—whether it's the AREA form or our internal one—before any information is shared.

• When referring from or to an unlicensed individual, always use our Client Referral Fee Consent – Unlicensed Referrer form to document and obtain the proper client consent.

Sample Email Template – Sending Consent Form to an Unlicensed Referrer

Subject: Referral Fee Consent Form – Please Review and Sign

Hi [Referrer's Name],

Thank you again for referring [Client’s First Name] to me – I truly appreciate the trust you’ve placed in me.

As part of our compliance with RECA (Real Estate Council of Alberta) and Canadian privacy standards, I’ve attached a Referral Fee Consent Form that outlines:

• Your role as an unlicensed referrer,

• The referral fee structure,

• And the client’s consent to this arrangement.

Please take a moment to review and sign the attached form. Once you’ve signed it:

1. You can email it back to me,

2. I’ll then collect the client’s signature,

3. And finalize it with mine before sharing the fully signed copy with you for your records.

Please note: You are not expected (or permitted) to participate in any of the licensed real estate activities. Your role is limited to the referral only.

Let me know if you have any questions at all—I want to make sure this process is clear and easy for you.

Best regards,
[Agent’s Full Name]
[Brokerage Name]
[Phone Number]
[Email Address]

Why It Matters

Referral fees are not just about getting paid—they’re about protecting client interests and upholding ethical standards. Failing to properly disclose a referral arrangement can lead to:

• Disciplinary action from RECA

• Loss of client trust

• Reputational damage

Stay compliant, stay transparent, and when in doubt—ask your broker for guidance.

Use attached Forms below.