Legal FAQs for REALTORS®
— Professional Standards
An owner who just terminated her listing with another broker asked me to sell her property. The parties terminated her listing using the Termination of Listing Agreement (TAR 1410), and the owner agreed to pay her previous broker a fee if she sells the property to a named party within the next two months. Can I still get a commission if she sells to the named party within that time frame? (updated May 12, 2014)
Yes, provided that you get the required consent from the owner. According to Standard of Practice 16-14 of the Code of Ethics, you should not knowingly obligate an owner to pay more than one commission except with the owner’s informed consent.
You can complete and attach the Named Exclusions Addendum to Listing (TAR 1402) to your listing agreement to help clarify your rights and the owner's rights and obligations should the owner sell to the named party during the designated time period.
Is having a signed written agreement, such as TAR’s Residential Buyer/Tenant Representation Agreement, the only way for a broker to create an agency relationship with a buyer? (Updated April 10, 2015)
No. Although agency relationships can exist when you’re acting on behalf of the buyer without a written agreement, the best way to create an agency relationship is to put the rights and obligations of a broker and his or her client in a signed written agreement,.
In addition to being a good business practice, there are several other reasons why broker-client relationships should be in writing:
1. You cannot enforce your right to collect your commission from a seller or buyer unless you have a signed written agreement with them agreeing to pay your commission, according to Section 1101.806(c) of the Real Estate License Act.
2. Section 1101.559 of the Real Estate License Act requires brokers who act as intermediaries to obtain the written consent of each party in the transaction and that written consent must also state who will pay the broker.
3. Article 9 of the Code of Ethics requires that REALTORS® shall assure whenever possible that agreements shall be in writing for the protection of all parties.
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