Iowa Real Estate Practice Exam

What is the legal consequence for a broker who pays an airline pilot for a lead?

1. It is a minor violation

2. It is illegal for the broker to pay the pilot for the lead

3. The broker may face a civil penalty

4. The pilot may be fined

The correct answer is: It is illegal for the broker to pay the pilot for the lead

The correct response highlights that it is illegal for a broker to pay an airline pilot for a lead. This is rooted in real estate laws and regulations that govern how brokers can operate. In many states, including Iowa, real estate brokers are prohibited from paying referral fees to individuals who are not licensed real estate agents. This ensures that all parties involved in real estate transactions are adequately trained and regulated. The rationale behind this law is to maintain ethical standards within the real estate industry and to ensure that all agents involved in the process are qualified and accountable. By paying an unlicensed individual, such as an airline pilot, for a lead, the broker not only risks legal repercussions but also undermines the credibility and professionalism of the real estate profession as a whole. In contrast, lesser violations or penalties do not apply in this case, as the act of paying an unlicensed person for leads is a direct violation of the law, rather than a minor issue. Additionally, while civil penalties could potentially be an outcome of violating real estate laws, the primary legal consequence here is the illegality of the action itself. Fines levied against the pilot for receiving such payments are also unlikely, given that the primary focus is on the broker’s actions that contravene real estate