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Listing or Commission Agreements
The Expiration of the Listing or Commission Agreement
There are two examples of uncertainty and potential conflict, in
particular, which can arise if a listing or commission agreement
is not definite in the terms of its expiration. First, if such
agreements are silent as to their expiration then the law
assumes a reasonable duration which can not be determined
with certainty until agreed upon by the parties or ruled upon by
a court and a court ruling on what is a “reasonable duration” is
dependant on both legal precedence and circumstances. Such
uncertainty is not in the best interest of any of the parties to the
transaction. Second, if a listing or commission agreement does
not clearly define its expiration then the commission associated
with a subsequent sale or lease brokered by another real estate
broker may be subjected to a claim by the previous real estate
broker who contends that their listing or commission agreement
is still effective and therefore entitles them to a portion of that
Also a well-drafted listing or commission agreement should
address the rights of the parties after the agreement has
expired or been terminated. If the broker has identified
acceptable property or a buyer or tenant for the property but
their listing or commission agreement expires before the
commission is earned, they could have difficulties collecting the
commission. Listing or commission agreements often provide
that upon the expiration or termination of the agreement, the
broker may, within a stated period of time, provide the party
obligated to pay the commission a list of potential sites, buyers,
sellers, or tenants that the broker identified. Listing or
commission agreements will typically grant to the broker the
right to receive a commission in the event the property is leased
or sold to or from one of those prospects identified by the
broker, again usually within a stated period of time.
Return to Listing or Commission Agreements
Law Office of
Craig W. Little, P.A.