Do we, as real estate licensees get paid anything for sending a client into buying a t.i.c?

If I have a client who buys into a t.i.c instead of a replacement property, are we able to make a commission or referral fee from it, or does my seller always have to buy into a like kind property from me?
In Selling Property - Asked by Mar R. - Apr 11, 2010
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Jennifer D.
Danvers, MA

If it's within the state you are licensed in, you can draw a "consultation fee" on any type of real estate transaction. It can be a separate agreement.
Brian Dapice
Keller Wiliams Commercial

Apr 11, 2010
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Brandi L.
Oak Brook, IL

A consultation fee may be a creative way of circumventing the fact that TIC investments are classified as securities and a securities license is necessary to obtain a commission or referral fee. Never tried this before. Remember that "like kind" is used in section 1031 in a very broad sense. The fact that the property is an investment property will often suffice, i.e. selling multifamily, buying land, office, retail or industrial.

Apr 12, 2010
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Karim A.
San Diego, CA

Let me address both points you mention in your question. Firstly, TICs and replacement property are not mutually exclusive concepts - your client can purchase a like-kind property in a TIC while maintaining their IRS Code Section 1031 Tax Deferred Exchange requirements. Secondly, since your client would be replacing one (fractional) property for another (fractional) property, commissions and referral fees are very much possible in the same way as non-fractional property transactions. As an example, we offer up to a 20% referral fee to any broker that refers a client that participates on our TIC acquisitions.
(619) 813-5809

Apr 15, 2010
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