SECTION 605:10-15-1. Disclosure of beneficial interest or referrals

(a)   No licensee shall, without disclosing such fact in writing to all parties on both sides of the transaction, either:

(1)   Accept or receive any fee, commission, salary, rebate, kickback or other compensation or consideration allowed by law in connection with the recommendation, referral or procurement of any product or service, including financial services.

(2)   Own any beneficial interest in any entity which provides any product or service, including financial services to home owners, home buyers or tenants, in connection with the sale, lease, rental or listing of any real estate. Activities or interests of associates shall ordinarily be disclosed to his or her broker who shall have the primary responsibility to make written disclosures covered by this Section to the parties.

(b)   If any associate owns any beneficial interest in any entity which provides any product or service, including financial services, to home owners, home buyers, or tenants, the associate shall disclose the nature and extent of such interest to his or her broker. The obligation to make such disclosure shall be a continuing one.

(c)   Notwithstanding the provisions of this Section, disclosure of a beneficial interest shall not be required if either:

(1)   The beneficial interest consists solely of a stock or other equity ownership in a publicly traded company where such ownership is less than one percent (1%) of the total equity value of such entity.

(2)   Such beneficial interest consists solely of a stock or other equity interest in a privately held company in which the aggregate ownership of all licensees employed by the firm otherwise required to make the disclosure does not exceed ten percent (10%) of the equity value of the company and where the licensee is not an officer, director, managing partner or otherwise directly or indirectly is in control of the entity which provides any product or service covered by this Section.

(d)   No particular form of disclosure shall be prescribed by the Commission. All disclosures required by this Section shall be made:

(1)   Either prior to or at the time that any recommendation, referral or procurement of any product or service is made in instances in which the licensee may receive any compensation or consideration in connection therewith.

(2)   At or before the time that it becomes apparent to the licensee that any entity in which the licensee owns any beneficial interest may provide any product or service in instances in which the disclosure of any such ownership is required under this Section. All disclosures required by this Section shall be judged by the standard of whether the disclosure was adequate to inform all parties on both sides of the transaction of the existence of a beneficial interest covered by this Section or, if a party claims not to have been adequately informed, whether the form and manner in which the disclosure was made was adequate under the circumstances to inform a person of ordinary intelligence and understanding, not possessing expertise in real estate or financial matters, of the existence of any fee, compensation, salary, rebate, kickback or other compensation or consideration or the ownership of a beneficial interest in an entity providing products or services covered by this Section.

(e)   The failure by a licensee to observe any provision of this Section shall be deemed to be a violation of subsections 2, 3, 8 and 15 of Section 858-312 of the Code and in the case of an associate, a violation of subsection 4 of Section 858-312 of the Code as well.

[Source: Amended at 15 Ok Reg 3322, eff 7-13-98; Amended at 16 Ok Reg 2561, eff 7-1-99]