Cash advance system for real estate commissions affirmed: KENTUCKY REAL ESTATE COMMISSION V. HILLIARD FINANCIAL, LLC (COA 2/15/2008)

KENTUCKY REAL ESTATE COMMISSION V. HILLIARD FINANCIAL, LLC
BUSINESS:  REAL ESTATE COMMISSIONS AND ASSIGNMENTS
2007-CA-000861
PUBLISHED: AFFIRMING
PANEL: LAMBERT PRESIDING; VANMETER, KNOPF CONCUR
COUNTY: JEFFERSON
DATE RENDERED: 2/15/2008

COA affirmed a declaratory judgment holding that the cash-advance business of Hillard Financial (d/b/a Commission Express) and Commission Express National, Inc., does not violate Kentucky’s Real Estate Code following appeal by Kentucky Real Estate Commission.  The cash-advance business did not conflict with Real Estate Code provision prohibiting commission splitting or with Code provision prohibiting agents from receiving cash advances in consideration for the performance acts under the Code.

Commission Express is in the business of providing cash advances to real estate agents who have commissions pending from real estate transactions. In return for the advance, Commission Express takes an assignment of the agent’s pending commission as well as a percentage of that commission. Commission Express characterizes its business as “factoring,” while one court has characterized it as a straight-forward consumer-lending business.

Michael Stevens

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