BROKER RISK MANAGEMENT
WEEKLY PRACTICE TIP
QUESTIONS AND ANSWERS FROM SEPTEMBER 14, 2026 WEBINAR
Broker Risk Management (“BRM”) held a Risk Management Seminar on September 14, 2026 to discuss CAR’s most challenging forms. The following are questions and answers from that webinar:
QUESTION NO. 1: If a buyer cancels a Buyer Representation and Broker Compensation Agreement (BRBC) with Broker 1, does it mean the buyer will owe Broker 1 a commission within 30 days of cancellation and/or cannot work with another broker until 30 days after cancellation?
ANSWER: That depends on the terms of the BRBC. If the BRBC is non-exclusive, the cancellation is effective immediately upon cancellation by either party. However, if the BRBC is exclusive, the cancellation is not effective for 30 days after the cancellation by either party. Therefore, if the buyer is in escrow, or writes an offer or provides other evidence of Broker Involvement, during that time, Broker 1 could be owed a commission on properties covered by that BRBC.
QUESTION NO. 2: If a buyer is a limited liability company, what are the time limitations for a BRBC?
ANSWER: The time limitation for a buyer broker agreement for a limited liability company, corporation, or partnership is not limited by law. However, the time for a listing agreement is limited to two years. Therefore, there should be a presumption that a buyer broker agreement should not last more than two years.
QUESTION NO. 3: Is a Property Showing Representation Agreement (PSRA) recommended for an open house for an unrepresented buyer?
ANSWER: Not necessarily. If you are the listing agent and you are holding the home open, an unrepresented buyer can see the property without a representation agreement because you are acting for the benefit of the seller and as the seller’s representative. However, once you enter into a conversation with a buyer about representing them, to ensure you receive a commission from that buyer for the showing of the property, a PSRA should be used.
QUESTION NO. 4: I am representing a buyer and I am paying a referral fee to another agent. The seller is paying the buyer agent commission. I sent the Realtor Acknowledgement and Disclosure (CAR form RAD) to the listing agent disclosing that referral fee. The listing agent advised me that the listing agent would not have the document signed by the seller. How do I handle this situation?
ANSWER: You cannot make a seller sign a RAD form. However, your file should clearly reflect (e.g., keep the email sending the RAD form to the listing agent) that you sent the form to the listing agent. As long as the listing agent received it, the seller is deemed to have received it.
QUESTION NO. 5: The seller is paying 2.5% of buyer’s commission, the buyer is paying an additional .5%. The buyer’s compensation is being used to pay a referral fee to another agent. Does the seller need to sign the RAD or a referral agreement? If any part of the seller’s compensation is being used to pay the referral fee, is the seller required to receive a RAD form?
ANSWER: If the buyer’s compensation payment is being used to pay the referral fee, the buyer should receive the disclosure. If any part of the seller’s compensation is being used to pay the referral fee, it should be disclosed to the seller.
QUESTION NO. 6: Is the RAD a required form?
ANSWER: No. The actual RAD form is not a required form. However, disclosure of any referral fees to the affected party is a requirement. The affected party is the party whose money is being used to pay the referral fee. The RAD form can be used to make this disclosure and could also be used for an agent to disclose any ownership or financial interest in the subject property and/or disclosing the receipt of payment from multiple sources.
QUESTION NO. 7: If a seller has not delivered all the statutorily and contractually required disclosures to the buyer and the buyer has not removed the buyer’s contingencies and the deadline has passed for the buyer to remove the contingencies, can the seller issue a seller notice to perform?
ANSWER: No. If a seller has not fully performed and fulfilled all their obligations to provide required disclosures to the buyer, the buyer is not required to remove the buyer’s property investigation contingency. Moreover, a seller cannot cancel the contract if the seller has not fulfilled the seller’s obligations under that contract.
QUESTION NO. 8: If a buyer does not initial liquidated damages and arbitration of disputes, but the seller wants those provisions in the contract, can the seller in a seller counteroffer state, “Buyer and Seller agree that Paragraphs 29 (liquidated damages) and 31 (arbitration) are part of this Agreement, and Buyer shall initial those paragraphs.”
ANSWER: Yes, but under the law the provisions will not apply unless the buyer actually initials those provisions. The statement in the counteroffer may not be legally enforceable even if the counteroffer is signed by the buyer. The buyer will need to initial the provisions and the CAR Liquidated Damages and Arbitration Addendum (CAR form LDAA) could be attached to the Seller Counter Offer form to accomplish this or the RPA can be initialed.
WEEKLY PRACTICE TIP: DO NOT FORWARD TO CLIENTS. This Weekly Practice Tip is an attorney-client privileged communication for the exclusive use of clients of Broker Risk Management and their agents. It may not be reproduced or distributed without the express written consent of Broker Risk Management LLP. The advice and recommendations contained herein are not necessarily indicative of standards of care in the industry but rather are intended to suggest good risk management practice.