In August, 2014, Maryland legislators passed a regulation that requires real estate agents to verify that service providers they refer to consumers has up-to-date state licenses.
The regulation, passed to protect consumers from fraud and shady businesses, has been highly criticized by realtor estate agents, who claim that it restricts them from providing valuable knowledge to their clients.
“This regulation interferes with the professional relationship between the agent and his client… and turns the [real estate] agent into an agent for the state,” said Dennis Melby, former president of the Greater Capital Area Association of Realtors, former district vice president of the Maryland Association of Realtors and a real estate agent in Montgomery County.
If a real estate agent does want to refer a service provider to their clients, they must do so in writing. Failure to do so can result in a $5,000 fine.
By placing the responsibility on the real estate agents, and punishing mistakes with hefty fines, real estate agents are less likely to make referrals out of fear of making a mistake and receiving fines.
To make referrals easy on our colleagues in real estate, JK’s 2016 Maryland Business License can be viewed below.
You can read more about the regulation in The Washington Post.