Can I pay a referral fee to a broker whose license is inactive?
QUESTION: An agent and sole proprietor in another area of the state contacted me about a potential buyer referral, and we signed a Referral Agreement (Form 730) after we agreed on the terms of compensation. I met with the client and signed a buyer agency agreement, and it only took a few months for the buyer to go under contract. Closing is approaching, so I checked the North Carolina Real Estate Commission’s website to make sure the referring agent was licensed, and the website showed that the agent is inactive. When I called the Commission about this, they were able to inform me that the referring agent’s license was current when Form 730 was signed, but their license went inactive shortly thereafter. Can I pay the referring agent in this case?
ANSWER: Yes, you can pay the referring agent if they didn’t provide any brokerage services while their license was inactive.
To receive compensation, a broker’s license must be current. “Current” means that the renewal fee has been paid and the license is in active status. Rule .0504(a) of the License Law provides:
Subject to compliance with Rule .0110 of this Subchapter, the holder of a license on active status may engage in any activity requiring a real estate license and may be compensated for the provision of any lawful real estate brokerage service. The holder of a license on inactive status shall not engage in any activity requiring a real estate license, including the referral for compensation of a prospective seller, buyer, landlord or tenant to another real estate broker or any other party. (Highlighting added).
The North Carolina Real Estate Manual further explains that as long as a broker is “on active status throughout the period during which services were rendered (properties viewed, offers negotiated, contracts signed, and post-contractual issues addressed), then the firm may be paid and the firm may in turn pay the individual broker, even if their license is inactive or expired at the time of payment.” (Italics in original).
In your case, it looks like the only brokerage service rendered by the referring agent was the referral, and at that time, their license was current. If there were no other services rendered after they became inactive, then their license was current during all their brokerage activities. They can therefore be paid pursuant to the referral agreement you signed, even though their license is now inactive.
Release Date: 2/26/2026
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