Q: Is a cooperating broker who procures a buyer entitled as a matter of law to half of the commission that the listing broker receives?
A: No. There is no law entitling a cooperating broker to half of the commission received by a listing broker.
Q: I recently obtained a listing. The listing is a “Limited Service Listing Agreement” wherein the seller is agreeing to pay me a flat fee to list the property in the MLS. I indicated in the remarks section that cooperating brokers should contact the seller directly for showing instructions and contract negotiations. If a cooperating broker who participates in our MLS procures a buyer who enters into a purchase and sale contract with my seller, who is responsible for paying the commission offered in the MLS—me or the seller?
A: The MLS offer of compensation is a unilateral offer made by the listing broker, not the seller. Therefore, the listing broker is responsible for paying the cooperating broker the commission offered in the MLS.
Q: I’m a sales associate who recently switched brokers. Am I entitled to a commission on a listing that I procured and had under contract (but did not close) before I terminated my relationship with my former broker?
A: It depends. Generally, your only recourse would be to file a civil lawsuit against your former broker. In determining your right to be paid, the court could consider the independent contractor agreement between the broker and the sales associate, if one exists. If no such agreement exists, or if the independent contractor agreement is silent on the issue of payment of commissions after termination, the court would consider other evidence, such as the broker’s office policy manual, verbal agreements between the broker and sales associate concerning commissions, and past business practices of the broker as well as what is customary in the industry.
Q: I’m a broker with an exclusive right of sale residential listing agreement with a seller of a house. Because the seller’s friend bought the house, the seller says he doesn’t have to pay me a commission/brokerage fee. May I place a lien on the property?
A: The real estate license law provides that a broker cannot place a lien on a property unless (1) he or she is expressly permitted by contractual agreement with the seller to do so; (2) he or she is recording a civil judgment rendered by a Florida court.
Therefore, if your listing agreement or any other agreement with the seller does not permit you to put a lien on the property, you must file a lawsuit against the seller and obtain a judgment, which you can then record.
NOTE: The Commercial Real Estate Sales Commission Lien Act (found in sections 475.700 - 475.719) only applies where the property at issue meets the definition of "commercial real estate" as set forth in the act. The sale of a residential property improved with one single family residential unit does not constitute commercial real estate under the act.
Q: I’m a broker. A new sales associate that I hired has obtained a listing wherein a buyer and seller have entered into a contract for sale and purchase. My sales associate wants the closing agent to pay her portion of the commission directly to her when the transaction closes next month. My understanding is that only an employer (in this case, me) may pay an associate. May I instruct the closing agent to pay the sales associate’s portion of her commission directly to her at closing?
A: Yes. In 1999, the Florida Real Estate Commission (FREC) stated in a Final Order (FREC DS-98-02) that a broker “may by written authorization request that a closing agent disburse commissions directly to its salespersons following the closing of the transaction.” FREC clearly outlines in this Final Order what must be provided in the written authorization: (a) identify the transaction; (b) state the name of the salesperson entitled to the commission; (c) specify the amount the salesperson should be paid; and (d) sign the authorization.
Q: What is a variable, or dual rate commission agreement?
A: Generally, a variable or dual rate commission agreement refers to a listing where one amount of commission is payable if the listing firm is the procuring cause of the sale/lease and a different amount of commission is payable if the sale/lease results through the efforts of the seller/landlord or a cooperative broker.
Q: I’m a broker who recently represented a buyer in a purchase and sale contract. After closing, the buyer requested that I share my commission with his church in exchange for future referrals. May I do that?
A: No. Per Section 475.25(1)(h), Florida Statutes, a licensee may not share compensation with a person not properly licensed as a broker, broker-associate or sales associate under the laws of the state of Florida for the referral of real estate business.
Q: Last March, I entered into an exclusive right of sale listing agreement with a seller. I used one of the FAR exclusive right of sale listing agreement forms. I procured a buyer, and the parties went under contract on June 30 (a July 31 closing date was scheduled).
Meanwhile, my Listing Agreement expired July 6, and the seller declined an extension. I told the seller I would still assist him and attend the closing, but he says our agreement has expired and he no longer wants my services. Does this mean I’m no longer entitled to a commission for this transaction?
A: No. Paragraph 1 of FAR's exclusive right of sale listing agreement includes a provision that provides, in part, that "upon full execution of a contract for sale and purchase of the Property, all rights and obligations of the Agreement will automatically extend through the date of the actual closing of the sales contract."
Since the parties in your case went under contract before your listing agreement expired, the seller remains obliged to pay your commission July 31 (or the actual date the parties close).
Q: I’m a sales associate. For no reason, my broker is refusing to pay me a commission on one of my transactions that recently closed. If I notify the Florida Real Estate Commission (FREC) about this issue, will FREC force my broker to pay me my commission?
A: No. A commission dispute between a broker and a sales associate is generally a matter that can be resolved by a civil court. However, the sales associate’s independent contractor agreement may require some other form of dispute resolution such as arbitration or mediation.
Q: One of my listings is about to close. The seller asked me to give him a portion of my commission at closing. I would like to do so but I’m not sure if it’s permissible under Florida’s real estate license law. Is it?
A: Yes. Florida Administrative Code rule, 61J2-10.028(2) provides “[t]he sharing of brokerage compensation by a licensee with a party to the real estate transaction with full disclosure to all interested parties is not considered a violation of Chapter 475, Part I Florida Statutes.”
Q: I’m a salesperson who listed a property for a seller. After the closing, the seller refused to pay my commission. May I sue for my commission?
A: No. Under Section 475.42(1)(d), Florida Statutes, a sales associate is not allowed to “… commence or maintain any action for commission or compensation in connection with a real estate brokerage transaction against any person except a person registered as her or his employer at the time the sales associate performed the act or rendered the service for which the commission or compensation is due.” Therefore, in order to enforce the listing agreement your broker would have to file the lawsuit against the seller.
Q: If a broker's license was inactive when the broker procured a listing, is the listing contract valid?
A: No. Section 475.41, Florida Statutes, provides, "No contract for a commission or compensation for any act or service enumerated in Section 475.01(3), is valid unless the broker or sales associate has complied with this chapter in regard to issuance and renewal of the license at the time the act or service was performed."
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