BIC TIP #1118 – Disclosure Is Not Optional
North Carolina brokers must understand that referrals plus financial benefit equals mandatory disclosure. BIC TIP #1118 is rooted squarely in NCREC Rule .0109(b), and it applies far more broadly than many brokers realize.
When you refer a client to any outside business—lender, inspector, contractor, home warranty company, staging company, moving service, or otherwise—and you or your firm have a financial interest, the law requires full and timely disclosure to the client. This rule is not limited to settlement services and is not dependent on whether the client is harmed.
If you receive, or even anticipate the possibility of receiving, anything of more than nominal value as a result of that recommendation, disclosure is required. That includes:
- Ownership or equity interests
- Profit-sharing arrangements
- Referral fees
- Discounts or rebates
- Any other economic benefit tied to the client’s use of the provider
Silence is not neutrality. Failure to disclose is a license law violation, even if the service provider does great work and the client is happy. The duty is about transparency, not outcomes.
If money, discounts, or perks are even possible, disclose early and in writing. When in doubt, sunlight wins.
