In what type of transactions can commission splitting occur?

Commission splitting is a practice that occurs primarily between licensed real estate brokers and salespersons. This is a standard aspect of the real estate industry where brokers often take a commission from a real estate transaction and may then share a portion of that commission with salespersons who have worked to facilitate the deal.

In Minnesota, as in many other states, it is vital for at least one party to hold a valid real estate license to engage in real estate transactions legally. Thus, commission splitting is not permissible between an agent and their clients, nor can it occur in transactions that do not involve licensed professionals. Additionally, commission splitting is not exclusive to timeshare properties; it applies broadly to various real estate transactions that involve licensed individuals.

Therefore, the correct choice highlights the necessary condition of licensing in commission discussions, emphasizing that only licensed brokers and salespersons are legally allowed to split commissions. This ensures that the transactions adhere to legal and ethical standards within the real estate industry.