Kansas Attorney General Opinion 2018-017

December 12, 2018
ATTORNEY GENERAL OPINION NO. 2018- 17
Erik Wisner, Executive Director
Kansas Real Estate Commission
Jayhawk Tower, Suite 404
700 S.W. Jackson
Topeka, KS 66603-3785
Re: 	Personal 	and 	Real 	Property—Real 	Estate 	Brokers 	and
Salespersons; Licensing—Prohibited Acts; Rebate; Referral Fee:
Gift Certificate
Synopsis: 	A licensee does not violate K.S.A. 2018 Supp. 58-3062(a)(3) or (4)
when a portion of the commission or fee paid to the licensee is
used to purchase a gift card that is conveyed to the licensee’s
client, provided the proceeds of the gift card do not reduce the
amount of commission, fee or purchase price paid by the licensee’s
client. 	Cited herein: 	K.S.A. 40-966; 40-2403; K.S.A. 2018 Supp.
40-2404; K.S.A. 40-3513; K.S.A. 2018 Supp. 58-3034; 58-3035; 58-
3062; K.S.A. 65-1516; 65-2837; L. 2008, Ch. 155, § 5; L. 2004, Ch.
180, § 6; L. 1995, Ch. 252, § 20; L. 1991, Ch. 153, § 5; L. 1989, Ch.
167, § 7; L. 1980, Ch. 164, § 29.
* 	* 	*
Dear Mr. Wisner:
On behalf of the Kansas Real Estate Commission, you request our opinion
regarding whether a licensee’s participation in a particular referral scenario would
constitute accepting or giving a rebate or paying a referral fee in violation of
K.S.A. 2018 Supp. 58-3062(a)(3) or (4). You set out the scenario as follows:

Erik Wisner
Page 2
A Kansas real estate licensee has entered into an agreement with
an 	out-of-state 	company, 	which 	holds 	a 	corporate 	real 	estate
license in another state, to be included in that company’s referral
network. 	As part of the referral agreement, the licensee agrees to
pay the company a percentage of the licensee's commission from
each referral that results in a closed sales transaction. 	The out-of-
state company keeps a portion of that payment and forwards the
rest to another company, which also holds a corporate real estate
license in another state. The second company uses those funds to
provide a gift card to the licensee’s referred client upon closing.
The amount of the gift card depends on the purchase price of the
property; the greater the purchase price, the greater the amount of
the gift card. 	The gift card is redeemable at hundreds of vendors
but is not a universally-accepted form of payment such as cash.
Because of their respective business relationships with the referral
company, both the referred client and the Kansas licensee know
the client will receive a gift card from the affiliated company if the
transaction closes. 1
The Real Estate Brokers’ and Salespersons’ License Act 2 (Act) provides for the
licensure and regulation of brokers and salespersons who, for compensation,
engage in the business of buying, selling, exchanging or leasing real estate. 3
Prohibited activities are set forth in K.S.A. 2018 Supp. 58-3062. 	The statute
provides, in part:
(a) No licensee, 4 whether acting as an agent, transaction broker or
a principal, shall:
. . . .
(3) Accept, give or charge any rebate or undisclosed commission.
(4) Pay a referral fee to a person who is properly licensed as a
broker or salesperson in Kansas or another jurisdiction or who
holds a corporate real estate license in another jurisdiction if the
licensee knows that the payment of the referral fee will result in the
payment of a rebate by the Kansas or out-of-state licensee. 5
In the scenario presented, the issue is whether conveyance of the gift card to the
referred client is payment of a “rebate” to the referred client of any commission,
fee or purchase price paid by the referred client.
1 Eric Wisner, Correspondence, February 19, 2018.
2 K.S.A. 58-3034 et seq.
3 See K.S.A. 2018 Supp. 58-3035(c), (f), (k) and (o).
4 “‘Licensee’ means any person licensed under this act as a broker or salesperson.” K.S.A. 2018
Supp. 58-3035(k).
5 K.S.A. 2018 Supp. 58-3062(a).

Erik Wisner
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The prohibition against accepting, giving or charging any rebate or undisclosed
commission has been in existence since the inception of the Act.6 The provision
precluding payment of a referral fee that results in the payment of a rebate was
added nine years later.7 	The Act, however, has never defined “rebate.” 	In
determining the meaning of “rebate,” we follow the rules of statutory construction.
[T]he fundamental goal of statutory construction is to ascertain the
intent of the legislature. 	But in determining legislative intent, the
starting point is not legislative history; rather, we first look to the
plain language of the statute, giving common words their ordinary
meaning. 	If the plain language of a statute is unambiguous, we do
not speculate as to the legislative intent behind it and will not read
into the statute something not readily found in it. 8
“Rebate” is defined as: 	“a) to give back (part of an amount paid) b) to make a
deduction from (a bill)” 9 and constitutes “1. [a] return of part of a payment, serving
as a discount or reduction. 	2. [a]n amount of money that is paid back when
someone has overpaid.” 10 The Wisconsin Court of Appeals applied the definition
from 	Black’s 	Law 	Dictionary 	when 	it 	determined 	that 	“the 	words 	‘rebates,’
‘refunds,’ and ‘discounts’ mean essentially the same thing – a reduction or credit
that is tied to the price of the good or service being purchased by the recipient of
the reduction or credit.”11 	“[T]o be a ‘discount,’ the ‘payment or allowance’ must
be a reduction from the price that would be paid if the ‘discount’ were not
given.” 12 	“A rebate is something that is returned to a purchaser out of the
purchase price of goods to accomplish a reduction of the purchase price.” 13
Payment of a portion of the price, even though unknown by the purchaser, has
also been found to be a rebate.14 	Therefore, conveyance of the gift card in the
scenario described above would violate K.S.A. 2018 Supp. 58-3062(a)(3) and (4)
6 See L. 1980, Ch. 164, § 29(a)(4). See also L. 2008, Ch. 155, § 5.
7 See L. 1989, Ch. 167, § 7(a)(4). See also L. 1995, Ch. 252, § 20(a); L. 2008, Ch. 155, § 5.
8 Univ. of Kansas Hospital Authority v. Bd. of County Comm’rs of the Unified Gov’t of Wyandotte
County/Kansas City, 301 Kan. 993, 998-99 (2015) (internal citations and quotation marks
omitted).
9 Webster’s New World College Dictionary 1211 (5th ed. 2016).
10 Black’s Law Dictionary 1458 (10th ed. 2009).
11 Tele-Port, Inc. v. Ameritech Communications, Inc., 248 Wis. 2d 846, 861-62, 637 N.W.2d 782,
790 (Wis. Ct. App. 2001).
12 Id. at 862.
13 Shinn v. Oklahoma Alcoholic Beverage Control Bd., 1964 Ok. 63, 397 P.2d 157, 160 (Okla.
1964). 	See also Prosperity Tieh Enterprise Co., Ltd. v. United States, 42 CIT ____, 284
F.Supp.3d 1364, 1369 (2018) and Papierfabrik August Koehler AG v. U.S., 38 CIT ____, 971
F.Supp.2d 1246, 1252 (2014) (19 C.F.R. § 351.102(b)(38) includes “rebate” as “any change in
the price charged for . . . the foreign like product” that was “reflected in the purchaser’s net
outlay”).
14 McGuire v. American Family Mutual Ins. Co., 448 Fed.Appx. 801 (10th Cir. 2011) (unpublished
opinion) (insurance agent paid portion of annual premium on term life insurance policy
unbeknown to insured; constituted an unfair method of competition or an unfair or deceptive act
or practice in the business of insurance under K.S.A. 40-2403 and 40-2404(8)).

Erik Wisner
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if it is a reduction of the amount paid by the referred client as the broker’s
commission or fee or the real property’s purchase price.
In the scenario presented, there is no indication that the gift card may be applied
towards the payment of the broker’s commission or fee or the real property’s
purchase price. 	Under such circumstances, there is no reduction in the amount
of commission, fee or purchase price paid by the referred client. 	Since the
commission, fee or purchase price is not reduced, there is no rebate in violation
of K.S.A. 58-3062(a)(3) or (4).
We note that a provision precluding the “[o]ffer[ing] or giv[ing] of prizes, gifts or
gratuities which are contingent upon a client’s listing, purchasing or leasing
property” was included in the original Act. 15 In 1991, the provision was amended
to state, “No licensee . . . shall: 	. . . (17) Offer or give prizes, gifts or gratuities
that are contingent upon an agency agreement or the sale, purchase or lease of
real 	estate.”16 	The 	prohibition 	against 	conferring 	prizes, 	gifts 	or 	gratuities
“demonstrate[d] a clear expression of public policy by a Legislature committed to
outlawing any form of prize, gift or gratuity by a real estate broker as an
inducement to attract clients.”17 	The scenario presented by the Kansas Real
Estate Commission would likely have violated these provisions. 	The statutory
prohibition of offering or giving prizes, gifts or gratuities, however, was repealed
in 2004. 18 	Courts generally presume that when the Legislature revises an
existing law, it intends to make a substantive change. 19
Further evidence of such a change is found in legislative acts pertaining to other
professions that include similar restrictions regarding the payment of rebates. 20
15 See L. 1980, Ch. 164, § 29(a)(12).
16 L. 1991, Ch. 163, § 5(a).
17 Attorney General Opinion No. 98-53.
18 L. 2004, Ch. 180, § 6.
19 State v. Pulliam, 430 P.3d 39 (Kan. 2018).
20 See, e.g., K.S.A. 40-966 (fire and casualty insurance; “No insurer or employee thereof, and no
broker or agent shall pay, allow, or give, or offer to pay, allow to give, directly or indirectly, as an
inducement to insurance, or after insurance has been effected, any rebate, discount, abatement,
credit or reduction of the premium named in a policy of insurance, or any special favor or
advantage in the dividends or other benefits to accrue thereon, or any valuable consideration or
inducement whatever, not specified in the policy of insurance, except to the extent provided for in
an applicable filing.”); K.S.A. 2018 Supp. 40-2404 (insurance agents; “The following are hereby
defined as unfair methods of competition and unfair or deceptive acts or practices in the business
of insurance: . . . (8) Rebates. (a) Except as otherwise expressly provided by law, knowingly
permitting, offering to make or making any contract of life insurance, life annuity or accident and
health insurance, or agreement as to such contract other than as plainly expressed in the
insurance contract issued thereon; paying, allowing, giving or offering to pay, allow or give,
directly or indirectly, as inducement to such insurance, or annuity, any rebate of premiums
payable on the contract, any special favor or advantage in the dividends or other benefits
thereon, or any valuable consideration or inducement whatever not specified in the contract; or
giving, selling, purchasing or offering to give, sell or purchase as inducement to such insurance
contract or annuity or in connection therewith, any stocks, bonds or other securities of any
insurance company or other corporation, association or partnership, or any dividends or profits
accrued thereon, or anything of value whatsoever not specified in the contract.”); K.S.A. 40-3513

Erik Wisner
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As is the situation with the Real Estate Brokers’ and Salespersons’ License Act,
none of the acts includes a definition of “rebate.” Unlike the Real Estate Brokers’
and Salespersons’ License Act, the prohibitions in those acts are not limited to
the payment of rebates, but include prohibitions against offering gifts, prizes and
other inducements.21 	“[W]hen legislative intent is in question, we can presume
that when the legislature expressly includes specific terms, it intends to exclude
any items not expressly included in the specific list.” 22
The Legislature has shown that it is able to preclude licensees from engaging in
conduct as set forth in the scenario. 	The provisions that would preclude such
conduct are not currently included in the Act. 	A licensee does not violate K.S.A.
2018 Supp. 58-3062(a)(3) or (4) when a portion of the commission or fee paid to
the licensee is used to purchase a gift card that is conveyed to the licensee’s
client, provided the proceeds of the gift card do not reduce the amount of
commission, fee or purchase price paid by the licensee’s client.
Sincerely,
Derek Schmidt
Attorney General
Richard D. Smith
Assistant Attorney General
DS:AA:RDS:sb
(mortgage 	insurance; 	“(c) 	Any 	mortgage 	guaranty 	insurance 	company 	which 	pays 	any
commission or makes any unlawful rebate in violation of the provisions of this article shall be
subject to the penalties prescribed in K.S.A. 40-2407 and 40-2411.”); 65-1516 (optometrists; “(b)
“Unprofessional conduct” means: . . . “(10) Directly or indirectly giving or receiving any fee,
commission, rebate or other compensation for professional services not actually and personally
rendered, 	other 	than 	through 	the 	legal 	functioning 	of 	lawful 	professional 	partnerships,
corporations or associations.”); 65-2837 (healing arts; “(b) ‘Unprofessional conduct’ means: . . .
(19) Directly or indirectly giving or receiving any fee, commission, rebate or other compensation
for professional services not actually and personally rendered, other than through the legal
functioning of lawful professional partnerships, corporations, limited liability companies or
associations.”).
21 See, supra, footnote 20.
22 In re Lietz Const. Co., 273 Kan. 890, 911 (2002).