What are Relocation Non-Compliance Fees?

When evaluating pricing during an RFP, it’s critical to understand how non-compliance fees are charged.

During the RFP process, it’s important to ask about non-compliance or referral recovery fees and understand when the fee is charged.

• When a Relocation Management Company (RMC) assists your employee with buying or selling a home, the RMC refers the employee to real estate Brokers within their network to ensure an efficient home sale or purchase.
• The RMC has an agreement with the selected real estate Brokers to receive a portion of the Broker’s commission ─ a referral fee ─ from the home sale or purchase transaction.
• To reduce overall service fees to corporate clients, most RMCs depend on receiving the real estate referral fee as a large part of their revenue stream.
• The RMC requires that the transferring employee work with the referred real estate Brokers. If the employee sells or purchases a home on their own or with a different Broker, the RMC may charge the corporation a non-compliance fee.
• The non-compliance fee is charged so the RMC can fully or partially replace the referral fee they would have received from the real estate Broker. Referral Recovery Fee is another term used to describe this charge.
• If your company fully supports compliance for the employee to use the RMC’s real estate Brokers, this can reduce the total fees paid, since the RMC earns revenue from real estate transactions.