What must an agent do if they receive an undisclosed bonus from a seller to incentivize closing by a certain date?

According to Maryland real estate law, a licensed salesperson is strictly prohibited from accepting any form of compensation for real estate brokerage services from anyone other than their affiliated broker. An undisclosed bonus from a seller is considered compensation. Therefore, the agent's legal and ethical obligation is to ensure any such bonus is paid directly to their supervising broker. The broker is then responsible for processing the payment, making the necessary disclosures to all parties in the transaction as required by agency law, and distributing the salesperson's share according to their employment agreement. This process ensures transparency and prevents conflicts of interest.

A. Accepting a bonus without disclosure is a violation of the agent's fiduciary duties of loyalty and disclosure to their client and Maryland law.

B. While disclosure to the client is required, the agent cannot personally accept the payment; it must be processed through the broker first.

C. Hiding compensation from the broker is a serious violation of Maryland real estate licensing law and the agent's agreement with the brokerage.

1. Maryland Code, Business Occupations and Professions Article, § 17-517. Payment of compensation.

Section (a) states: "A licensed real estate salesperson or a licensed associate real estate broker may not accept any compensation for providing real estate brokerage services from any person other than the real estate broker with whom the real estate salesperson or associate real estate broker is affiliated." This statute directly supports that all compensation must flow through the broker.

2. Code of Maryland Regulations (COMAR) 09.11.02.01. Code of Ethics.

Section C, "Relations to the Client," states: "(1) In accepting employment as an agent, a licensee shall protect and promote the interests of the client. This obligation of absolute fidelity to the client’s interest is primary..." Accepting an undisclosed bonus from another party creates a conflict of interest and violates this primary duty.

3. University of Baltimore School of Law, Course: REAL 605 - Real Estate Transactions.

Course materials consistently emphasize that the brokerage agreement is between the client and the broker, not the salesperson. All commissions and fees are legally earned by and paid to the brokerage firm, which then compensates the salesperson. This principle applies to all forms of compensation, including bonuses.