Your Comments on the Foreign Investment in Real Property Tax Act, Nicknames, and Referral Fees

June 01, 2018

The Foreign Investment in Real Property Tax Act (FIRPTA) requires buyers in certain transactions involving foreign sellers to withhold funds for federal taxes. In response to a legal FAQ about an agent’s potential liability if a seller falsely certifies he’s not foreign, members recognized the need for education on FIRPTA and opined about who should be responsible for determining its application.

Raul Giorgi wrote that “perhaps a promulgated form” is in order, adding that agents may find it awkward to ask about a seller’s status. Lilly Hughes and Andres De Pina agreed that more education would be helpful.

Others argued that someone else should ask about foreign seller status under FIRPTA. In the same way the General Information and Notice to Buyers and Sellers (TAR 1506) states that brokers and agents aren’t attorneys or inspectors, Doris Snipp wrote, maybe IRS agent and immigration officer should be added to that list. Jolie Williams wrote that she appreciated the issue being brought up and only learned about it herself after a title company withheld funds on behalf of her buyer to satisfy the law.

The Texas Real Estate Commission serves license holders of many races and ethnic origins, pointed out Adesegun Abayomi Owolabi on a blog post about using nicknames in advertising. “What happens with my middle name?” he asked, noting it shortens to Yomi, or his first name, which can go by Ade or Segun. “Do these names require registration because they’re not anglicized?”

Would you feel silly sending someone a $50 gift card if they sent a $1 million referral your way? That’s what Tommy Pennington wrote about the current $50 non-cash gift limit set by TREC for what you can pay an unlicensed person for a referral. “This won’t even allow me to send a couple out for a nice dinner,” Randy Waterman wrote. Maybe it’s time for the limit to be updated, suggested Pennington.

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