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             Listing or Commission Agreements

Other Provisions Related to the Commission

The party who will be responsible for paying the commission
should be identified in the listing or commission agreement.  If
the party that is responsible for paying the commission is not
clearly identified in the listing or commission agreement then
legal precedence presumes that the party that engages the
broker and acts as the principal to the broker is responsible for
the payment of the commission to that broker.  The application
of this legal precedence could create confusion if there are
cooperating brokers in a transaction.  If one broker has been
engaged by the owner of the property and another broker has
been engaged by the purchaser of the property or the tenant of
the property then the application of this legal precedence could
lead to an assignment of responsibility for the payment of the
commission that is quite different than what may be
contemplated by the parties which is typically assigning the
obligation to pay all commissions to one of the parties and the
brokers divide that commission.

And how cooperating brokers will divide a commission is another
term that can be included in a listing or commission agreement
to avoid confusion.  If a party is to pay all the commissions in the
subject transaction and the commission is to be divided in the
event there is a cooperating broker, then including the terms by
which the commission will be divided among the brokers can
prevent potential conflict and provide notice to all parties as to
their rights and obligations.  Explicitly including these terms for
the division of the commission among the brokers can also
avoid the responsible party paying the commission twice.


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Law Office of
Craig W. Little, P.A.