Legal FAQs for REALTORS® — Commission Disputes
MLS Offers

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I saw a listing in the MLS that offered compensation for cooperating brokers of that MLS. The listing broker wrote in the agent remarks that the compensation offered would be reduced if the contract closed after a certain date. Does this violate MLS rules? (Updated April 11, 2016)

Yes. MLS policy and rules require that a listing broker specify on each listing what compensation is offered to other MLS participants for their services in the sale of that listing. Such offers must be unconditional except that entitlement to compensation is determined by the cooperating broker’s performance as the procuring cause of the sale. The offer you described appears to be conditional and therefore prohibited by the MLS policy and rules.


I listed a rental property in the MLS and offered compensation to other MLS participants. Another broker who is an MLS participant saw my listing and submitted her client’s lease application to me. After the landlord accepted her client’s application and executed the lease, the broker told me I must sign the Agreement Between Brokers for Residential Leases. Do I have to sign the agreement? (updated October 13, 2015)

No. An offer of compensation in the MLS becomes enforceable when the cooperating broker is the procuring cause. No other agreement is necessary.

Some brokers find the Agreement Between Brokers for Residential Leases (TAR 2002) beneficial, since it specifies a time frame for payment, and covers compensation for lease renewals and sales. Still, an agreement between brokers is not required to enforce the offer of compensation specified in the MLS.


My seller just entered into a contract with a buyer whose broker doesn’t participate in my MLS. The buyer’s broker says I must pay him the compensation I offered with my MLS listing when the sale closes. Is that true? (updated November 9, 2015)

No. A listing broker’s offer of compensation in the MLS only applies to other MLS participants and cannot be enforced by a nonparticipant. You and the nonparticipating broker can negotiate other compensation using the Registration Agreement Between Brokers (TAR 2402) form.


Legal Disclaimer: The material provided here is for informational purposes only and is not intended and should not be considered as legal advice for your particular matter. You should contact your attorney to obtain advice with respect to any particular issue or problem. Applicability of the legal principles discussed in this material may differ substantially in individual situations.

While the Texas Association of REALTORS® has used reasonable efforts in collecting and preparing materials included here, due to the rapidly changing nature of the real estate marketplace and the law, and our reliance on information provided by outside sources, the Texas Association of REALTORS® makes no representation, warranty, or guarantee of the accuracy or reliability of any information provided here or elsewhere on TexasRealEstate.com. Any legal or other information found here, on TexasRealEstate.com, or at other sites to which we link, should be verified before it is relied upon.

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