Is This Legal?
Absolutely. Here's the complete legal framework behind LRCO and your investment partnership.
Legal Structure
Securities Compliance
LRCO operates as a properly structured securities offering under federal and state regulations. All investment partnerships are issued through compliant subscription documents and meet suitability standards.
- SEC-compliant private placement structure
- State securities law compliance
- Accredited investor verification
- Professional legal oversight
Regulatory Compliance
All offerings structured in full compliance with federal and state securities laws.
Real Estate Law Compliance
Referral structures comply with RESPA and state real estate regulations.
Real Estate Compliance
All referral arrangements comply with the Real Estate Settlement Procedures Act (RESPA) and state real estate laws. Distribution sharing is structured as legitimate business partnerships, not illegal kickbacks.
RESPA Compliance Statement: Agent participation in the True Title Co-Op is not contingent upon the referral of business. Ownership does not require nor guarantee future title orders and is not offered in exchange for business referrals, in accordance with RESPA Section 8. We operate in line with RESPA §1024.14(g)(1)(v), which allows for educational and promotional partnerships as long as there is no compensation tied directly to a referral.
- RESPA-compliant referral structures
- State real estate law compliance
- Legitimate business partnerships
- No illegal kickback arrangements
Understanding RESPA §1024.14(g)(1)(v)
This specific RESPA clause prohibits providing a thing of value (like money, services, or ownership) in exchange for the referral of business. However, it includes an important exception:
"Nothing in this section prohibits... normal promotional and educational activities... provided that such activities are not conditioned on the referral of business."
Translation: If your co-op doesn't require referrals to earn ownership — you're not violating RESPA.
How We Stay Compliant
- You do not have to refer any business to become or remain an owner
- There is no quota, no expectation, and no pressure to send deals
- Ownership is offered based on participation in the co-op — not conditional on referrals
- We're building ownership into the infrastructure — just like a credit union or agricultural co-op
What We Don't Do (To Stay Compliant)
- • We don't say "Send us 3 closings and you get equity"
- • We don't promise rewards only if deals are referred
- • We don't track ownership based on deal volume
- • We don't tie distributions directly to closings by that agent
What We Do (Legally Compliant)
- • Offer co-op shares upfront through a membership agreement
- • Provide education and promotional events
- • Celebrate usage, but don't tie it to ownership
- • Structure as a passive co-ownership model, not a referral rewards program
How Money Flows Legally
Client Transaction
Your client uses services from LRCO network partners (title, mortgage, insurance, home warranty, roofing).
Partner Distribution Share
Service providers pay ownership distributions to our collective for network participation.
Equity Distribution
LRCO distributes profits to investment partners based on ownership percentage, a direct correlation to ownership, not referrals.
Key Legal Distinctions
✓ What We Do (Legal)
- • Legitimate business partnerships
- • Equity ownership in network entity
- • Distribution sharing from business operations
- • Transparent fee structures
- • Compliant securities offerings
- • RESPA-compliant ownership structure
- • No compensation tied to referrals
- • Educational and promotional partnerships
✗ What We Don't Do (Illegal)
- • Direct kickbacks for referrals
- • Undisclosed fee arrangements
- • RESPA violations
- • Unregistered securities offerings
- • Pyramid or MLM structures
Built-In Compliance Features
Documentation
All agreements properly documented and legally reviewed.
Legal Review
Ongoing legal oversight and compliance monitoring.
Disclosure
Full transparency in all fee arrangements and partnerships.
Risk Management
Proactive compliance and risk assessment protocols.
Plain English Translation
The Bottom Line
LRCO is a legitimate business that creates legal partnerships between real estate agents and service providers. You're not getting paid for referrals—you're getting paid as an equity owner in a business network. Your participation is not contingent upon referring business, and ownership doesn't require or guarantee future title orders.
Think of it like owning stock in a company. When the company makes money, shareholders get dividends. When LRCO makes money from legitimate business operations, equity partners get distributions.
Why This Works
Legal Structure
- • You own equity in the network
- • Partners pay network participation fees
- • You receive ownership distributions
- • All arrangements are disclosed
Compliance Benefits
- • No RESPA violations
- • Legitimate business purpose
- • Transparent fee structures
- • Professional legal oversight
Your Protection
Every aspect of LRCO has been designed with legal compliance in mind. You're protected by:
- Comprehensive legal documentation
- Ongoing compliance monitoring
- Professional legal legal counsel
- Transparent business operations
The Simple Truth
You're not getting paid to send deals.
You're owning part of a business you help grow.
You can close with whoever you want — we just think you'll want to close with us.
This is structured as a passive co-ownership model, not a referral rewards program. Think credit union or agricultural co-op — you own part of the infrastructure that serves your industry.
Questions About Legality?
We encourage you to have your attorney review our offering documents.
Transparency builds trust.
Complete offering package provided upon application approval.