Conditional vs. Unconditional Termination

ORLANDO, Fla. — Now that we’re in a post-NAR settlement landscape, if a Realtor® or MLS participant is working with a buyer, they will need a written agreement prior to touring a home. Florida Realtors® has created and updated multiple buyer agreements options in recent months. One of those updates makes it so that Exclusive Right of Sale Listing Agreements (ERS) and Exclusive Buyer Brokerage Agreements (EBBA) now have substantially similar provisions about conditional and unconditional termination.

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One key feature of the termination language in both the ERS and EBBA is that they both require the consumer to get the broker’s consent to terminate. Based on numerous conversations with members on the legal hotline, brokers often honor a request to terminate an ERS or EBBA. If a broker does agree to a termination, the modification agreements for both the ERS and EBBA offer two types of terminations – conditional and unconditional.

Note that the ERS and EBBA don’t have the phrase “unconditional termination” inside the forms. They only reference conditional termination. However, both forms have their own modification agreements, which offer either a conditional or unconditional termination. The ERS modification form is called the Modification to Listing Agreement (MLA), and the EBBA modification form is called the Modification to Exclusive Buyer Brokerage Agreement/Showing Agreement (MEBBSA).

Also note that the conditional and unconditional termination language that has been present in the MLA for hears has been modified. The language in the MEBBSA largely mirrors that of the MLA, with one difference. See below for the current language.

Conditional termination

This termination could have strings attached for the consumer post-termination, so it best fits someone who no longer wants to buy or sell until the original termination date and protection period (if any) expire. There is a blank to insert a new termination date (the date on which the agreement will expire), which could be any date the parties agree on. The language in the MLA and MEBBSA is identical.

• The parties agree to conditionally terminate the Agreement. Consumer will pay the agreed upon cancellation fee and the conditional early termination date will be ____.

Unconditional termination

This termination fits a consumer who wants the option to continue trying to go under contract, with or without the help of another broker, after the termination. Under unconditional termination, both sides agree to release each other from obligations under the agreement and from any claims or actions. There is one additional sentence in the MLA, noted in bold font below, so you can compare.

• MEBBSA: Broker and Consumer hereby agree to unconditionally terminate the Agreement. Broker and Consumer mutually release each other from all obligations under the Agreement and release each other from any and all claims and actions arising from or related to the Agreement.
• MLA: Broker and Owner/Seller hereby agree to unconditionally terminate the Agreement. Owner/Seller agrees to reimburse Broker for all direct expenses incurred in marketing the Property. Broker and Owner/Seller mutually release each other from all obligations under the Agreement and release each other from any and all claims and actions arising from or related to the Agreement.

Joel Maxson is Associate General Counsel.

Note: Information deemed accurate on date of publication.

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