Executive Director Phillip T. Fisher was recently contacted by Carl E. Falco, Assistant
Director of the Structural Pest Control Division of the N.C. Department of Agriculture,
for assistance in advising real estate agents about a problem in the pest control
industry.
According to Mr. Falco, a North Carolina pest control company has circulated a flier offering a referral fee to real estate agents who refer structural pest control work (i.e., "wood-destroying insect information reports" and treatment fees) to the company. Distribution of the flier has resulted in an investigation by the Division and has prompted an article in the spring issue of the Division's newsletter warning of the consequences of this practice, which is a violation of the General Statutes of North Carolina.
Mr. Fisher wishes to join Mr. Falco in reminding real estate licensees that by Commission rule, brokers and salesmen are prohibited from receiving any compensation for recommending, procuring or arranging for any service in connection with a real estate transaction unless full disclosure is made to the party to whom the service is recommended. In no event may a real estate licensee receive a referral fee if the payment of the referral fee is otherwise prohibited by law. Therefore, because payment of a referral fee by a licensed pest control operator is prohibited, a real estate licensee must not accept such a fee.
Mr. Falco assured Mr. Fisher that his Division does not suspect any real estate licensees of wrongdoing. His purpose in contacting the Commission was to request assistance from the real estate industry in reporting any knowledge of referral fee offers from persons regulated by the Structural Pest Control Division. The Division promises to "vigorously pursue and prosecute all such reports. "