Code of Ethics Q
May I serve a glass of wine to clients over age 21 who visit my office, similar to when a client visits an upscale hair salon? A
There’s no law prohibiting this activity; however, it’s not recommended for a number of reasons, including but not limited to premises liability issues and licensing law problems. For example, what happens if the client becomes tipsy at your office and is injured or gets behind the wheel of a car and causes an accident?
Moreover, what if the client enters into an exclusive representation agreement with you, agrees to accept your offer to list his or her property or decides to make an offer to purchase someone else’s property and later regrets the decision and accuses you of serving wine in an effort to influence the outcome? All of these scenarios could open the door to both personal and Florida Real Estate Commission liability. Contracts Q
Last March, I entered into FAR’s Exclusive Right of Sale Listing Agreement (ERS-11tbx), as a transaction broker for a seller. I procured a buyer, and the parties went under contract on June 30 (a July 31 closing date was scheduled).
Meanwhile, my Listing Agreement expired July 6, and the seller declined an extension. I told the seller I would still assist him and attend the closing, but he says our agreement has expired and he no longer wants my services. Does this mean I’m no longer the seller’s agent and/or not entitled to a commission for this transaction? A
No. Paragraph 1 of FAR’s Exclusive Right of Sale Listing Agreements and the Exclusive Brokerage Listing Agreement contains a provision that upon “full execution” of a contract for sale and purchase, the Listing Agreement is extended until the date of closing, as long as the Agreement is validly in effect when the parties enter into their contract, and regardless of whether it’s scheduled to expire before the closing.
Since the parties in your case went under contract before your Listing Agreement expired, the Agreement was extended until July 31 (or the actual date the parties closed).
Accordingly, you remained the seller’s agent until closing and should’ve received your commission. If you weren’t paid, you now have a civil action against the seller. It’s best to have an attorney review your Listing Agreement, including paragraph 10 (“Dispute Resolution”) to determine what to do next. Real Estate Practice Q
I entered into a Limited Service Listing Agreement with my seller, who paid me a flat fee to list his property in the MLS. The MLS listing advises that cooperating brokers should contact the seller directly for showing instructions and contract negotiations. If another broker brings a buyer who enters into a purchase and sale contract with my seller, who is responsible for paying the buyer’s broker’s commission—me or the seller? A
The listing broker is responsible for paying whatever commission is offered in the MLS. Ownership of the MLS listing lies with the listing broker; a seller has no access to the MLS without paying the broker (whether via flat fee, full service agreement or otherwise).
Thus, the MLS offer of compensation is coming from the listing broker, not the seller, regardless of whether the listing broker does anything beyond providing the MLS listing.
In this type of scenario, the seller and cooperating broker are free to negotiate additional commission, coming directly from the seller. However, if at closing, the seller reduces or withholds any commission without the cooperating broker’s consent, and that broker receives less than what was offered in the MLS, he or she may file for arbitration against the listing broker for any unpaid amount up to the MLS offer of compensation. Search through more Q&As online in the Legal Center at floridarealtors.org. FAR Members may speak with attorneys on a range of topics including licensing, contracts and landlord/tenant matters.
Legal Hotline: (407) 438-1409