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RESPA safe harbor for broker-owners: the checklist

RESPA’s Affiliated Business Arrangement exception has a “safe harbor.” Meet it and broker-owned title is permitted; miss it and the same structure becomes an illegal kickback. Here’s the checklist.

📅 June 19, 2026 · 6 min read

The three safe-harbor conditions

  • 1. Written disclosure of the affiliated relationship and an estimate of the affiliated provider’s charges, given to the consumer at or before the referral.
  • 2. No required use — the consumer is free to shop and is never required to use the affiliated title company.
  • 3. Bona fide return only — the only thing of value the owner receives (beyond the disclosure) is a return on the ownership interest, proportional to ownership and not tied to referrals.

The “bona fide” test — is it a real company?

Meeting the three conditions isn’t enough if the entity is a sham. Regulators weigh factors like whether the company:

  • Is adequately capitalized for its business
  • Has its own employees, office, and equipment (or pays fair market value for services)
  • Performs core title services rather than just funneling orders
  • Competes for business in the marketplace and bears real risk
  • Receives referrals from sources other than its owners

A genuine joint venture is built to pass these factors — real staff, real operations, real risk.

What breaks the safe harbor

Requiring use, hiding the relationship, paying “distributions” that track referral volume instead of ownership, or running a shell with no real operations. Any of these turns a legal ABA into a Section 8 violation. See the myths that trip brokers up.

Checklist, not legal advice. Your structure and disclosures should be prepared and reviewed by qualified RESPA counsel.
Common questions

Frequently asked questions

What is the RESPA ABA safe harbor?
A provision that permits affiliated business arrangements — including broker-owned title companies — if there is proper disclosure, no required use, and the owner’s only return is a bona fide return on ownership.
Does the safe harbor require the company to be real?
Yes. Beyond the three conditions, the entity must be a bona fide operating business, not a sham. Regulators weigh capitalization, staffing, real services, market competition, and risk.
Can owner distributions be based on how many referrals I send?
No. Distributions must be a return on the ownership interest, proportional to ownership and independent of referral volume. Tying payments to referrals breaks the safe harbor.
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