Co Broker Fee Agreement

However, following subsequent written communications, Monopoly Realty and World Business Brokers signed a co-brokerage agreement for the sale of the property. The brief written agreement stipulated that World Business Brokers would receive half of the commissions that Monopoly Realty earns from the sale of the property in question. In return for the agreement, World Business Brokers Monopoly Realty provided information that the property was for sale. To put it simply, commission sharing is only allowed for real estate transactions where only one party receives a commission. For example, when selling a property where only the seller`s agent receives a commission from his client, the buyer`s agent may receive a co-commission from the seller`s agent, since the buyer has not paid a commission. If the buyer`s agent already receives a commission from his client, he cannot charge a co-brokerage fee from the seller`s agent. The tenant`s intermediary must conclude a commercial contract with the owner. The commercial agreement must clearly state that the broker is not acting for the landlord and that the payment of the royalty is made exclusively for the presentation of the tenant to the lessor. The real estate agent must also declare in writing to the tenant that he receives a fee from the landlord. However, the court found that the contract between Monopoly Realty and World Business Brokers, although a “bad deal” for Monopoly Realty, was binding and enforceable on all parties. It also found that the co-brokerage contract was supported by appropriate consideration (the information that the property was for sale) and that it could not have been terminated by Monopoly Realty after receiving the information. The Court of Justice found that World Business Brokers had fulfilled its obligation under the contractual conditions and that the contract was therefore enforceable.

Many may think that the court`s decision is too rigid, applies a strict constructivist approach in the interpretation of the contract and ignores the reality of co-brokerage agreements – namely that there is an implication, that each party would draw its own weight. By refusing this involvement, the court left the parties the agreement they had reached, warnings and everything. In most states, the laws that describe when real estate agents are entitled to commissions are simple and clear. As a general rule, certain provisions of the commission contract must be in writing. This is usually the start date, the end date and, of course, the amount of compensation. Because of statutes that have a direct influence on the right to commission, it is not necessarily so difficult to know who receives what. This is apparently the extent to which World Business Brokers participated in the operation. Monopoly Realty has fulfilled all the typical functions of a sales representative without the additional support of World Business Brokers. In addition, at some point, after the agreement between the two agents, but before the actual sale of the property, Monopoly Realty attempted to cancel the agreement by stating that World Business Brokers did not do any work to obtain a sale. Monopoly Realty eventually sold the property and received a real estate commission. Monopoly Realty and World Business Brokers were experienced real estate agents…