Prohibition against payment or receipt of settlement services kickbacks, rebates, commissions, and other payments; penalty.

Excerpt from the Virginia Code:

§ 55-525.12. Prohibition against payment or receipt of settlement services kickbacks, rebates, commissions, and other payments; penalty.

A. No person selling real property, or performing services as a real estate agent, attorney, lay settlement agent or lender incident to any real estate settlement or sale, shall pay or receive, directly or indirectly, any kickback, rebate, commission, thing of value, or other payment pursuant to any agreement or understanding, oral or otherwise, that business incident to services required to complete a settlement be referred to any person.

B. Nothing in this section shall be construed to prohibit:
1. Expenditures for bona fide advertising and marketing promotions otherwise permissible under the provisions of the Real Estate Settlement Procedures Act (12 U.S.C. § 2601 et seq.);
2. The provision of educational materials or classes, if such materials or classes are provided to a group of persons or entities pursuant to a bona fide marketing or educational effort;
3. The payment to any person of a bona fide salary or compensation or other payment for services actually performed for the business of the settlement service provider; or
4. An employer’s payment to its own bona fide employees for referrals of mortgage loan or insurance business. An employer’s payment to its own employees for the referral of insurance business shall be subject to the requirements of subdivision B 8 of § 38.2-1821.1.

C. No person shall be in violation of this section solely by reason of ownership in a settlement service provider, where such person receives returns on investments arising from the ownership interest, provided that such person discloses in writing to the consumer an ownership interest in those settlement services, including their ownership percentage in the settlement service provider pursuant to the requirements of § 55-525.13.

D. Any person who knowingly and willfully violates this section is guilty of a Class 3 misdemeanor. Any criminal charge brought under this section shall be by indictment pursuant to Chapter 14 (§ 19.2-216 et seq.) of Title 19.2.

(1996, c. 883, § 6.1-2.13:1; 1999, c. 109; 2002, c. 599; 2010, c. 794; 2011, c. 82.)

As usual, every law has a list of exceptions.  Consult with a Charlottesville attorney before taking any action. 

Tucker Griffin Barnes – Where deep insight equals powerful advantage.
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474

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About Charlotteville Personal Injury Attorney

Personal Injury attorney helping people injured in automobile, truck or mortorcycle accidents.
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