Broker's Commission
What laws govern commission?
61J2: a sales associate may neither operate as a broker nor independently without being under a broker. All commissions, listings, and contracts are legally property of the broker.
How can a broker demand unpaid commission for the transaction of a residential property?
A broker may place a lien on the property for nonpayment only if the broker is expressly authorized to do so in the listing agreement, buyer representation agreement or sale contract.
How does FREC punish brokers and associate for placing false info on public record and for place accurate info without prior expressed authorization to do so?
Any licensee found guilty of placing a lis pendens or lien on a property without authorization is subject to fines and suspension/revocation of license.
When can a broker set a fixed commission rate?
Broker can set a rate for their office independently of any other brokerage.
What is prohibited under RESPA?
Collecting kickbacks for title/closing services that were never performed
What law governs Commercial Real Estate SALES?
F.S. 475 Part III
What law governs Commercial Real Estate Leasing?
F.S. 475 Part IV
Can brokers come together to set a fixed commission or fee for service?
It is a criminal offense to conspire with other brokers to set a fixed commission or fee for service.
What rights does the broker hold under F.S. 475 part IV?
Lien rights for earned commission to be attached to the commercial real estate if it is attached to the landlord is obligated to pay and to the tenant's leasehold estate if tenant is obligated to pay.
What rights does the broker hold under F.S. 475 part III?
Lien rights to the seller's net proceeds for the commission earned by the broker in accordance with the listing agreement to sell commercial property. Broker must disclose to the owner(seller) the lien rights prior to executing the agreement and that once owner agreed these rights cannot be waived.
Can brokers share commission with anyone other than the other broker?
Only if all parties are in full disclosure that the broker is going to share the commission with another party. To comply with FREC this arrangement should be a signed written agreement by all interested parties.
Can a sales associate except extra commission?
Only if the giver sends it directly to the broker with a letter commending the associate. Realtors cannot accept extra commission or gift cards directly.
What is RESPA?
Real Estate Settlement Procedures Act
What happens when commission is due to a sales associate but unpaid?
Sales associate cannot sue or take action. They must ask the broker take action. Only broker's can demand unpaid commission.
What laws preserve competition and ensure against restraint of trade?
The Sherman Antitrust Act The Clayton Antitrust Act The Federal Trade Commission
If broker is not expressly authorized to demand commission earned in any of the contract what can they do?
They can only file a law suit to obtain judgement of commission owed.
What is the purpose of Antitrust Laws?
To protect competition according to F.S. 542
What is market allocation?
When brokers agree to split up competitive markets among themselves and not compete with each other.
What is price-fixing?
When competing brokers conspire to set a standard commission rate rather than letting the rate be set by the open market.
What are kickbacks or rebates?
an unearned fee paid associated with a real estate transaction for non real estate services.
What is a lis pendens?
notice of a pending lawsuit
What statement can be interpreted for price fixing?
"the going rate" or "normal commission rate"
Under what conditions are kickbacks legal?
-All parties of the transaction are informed -Kickback is not prohibited by law (RESPA) -Kickback is shared with one of the parties and all parties involved are informed -Kickback is a referral fee no more than $50 to current tenant for referring a new tenant
