BROKER RISK MANAGEMENT
WEEKLY PRACTIVE TIP
Broker Risk Management (“BRM”) has received a number of inquiries regarding the handling of co-listing agreements, particularly between different brokerages. There appears to be significant confusion regarding the usage of the correct forms and approvals to establish an enforceable co-listing arrangement.
For listings between agents in the same office, a single listing agreement should be executed with the seller. The agents should then create their own co-listing agreement between themselves. Because the seller has approved both agents from the same brokerage to work on the listing, it is not necessary for the seller to review and approve the in-house co-listing agreement. BRM has established a form for the internal usage of two agents within the same brokerage working on a single listing, entitled an Intra-Office Co-Listing Agreement. It is attached.
More complicated is a co-listing agreement between agents from different brokerages. In that instance, a listing agreement will be prepared between the seller and both brokerages, as soon as practicable. If a property is co-listed between two brokerages and the seller, a co-listing agreement between the brokers should also be created. If only one brokerage has a listing agreement with the seller and two agents from different brokerages are working on that listing, a co-listing agreement should be executed between the brokers and approved by the seller. Attached hereto is the BRM Inter-Office Co-Listing Agreement form.
Please note the following questions and answers:
QUESTION NO. 1: Another brokerage has a listing agreement with a seller. The agent asked for my assistance with regard to that listing. We signed a CAR Additional Agent Acknowledgment (form AAA) but no separate co-listing agreement. That agent has now terminated my services. Do I have any recourse?
ANSWER: By its terms, the CAR AAA form specifically refers to an agreement between the agents in the same brokerage. If there is no such agreement or memorialization of the terms of the agreement (in writing, whether by email, text, or other communication), it is unlikely that you will be able to collect any part of the commission. The Statute of Frauds requires all compensation agreements between agents and principals to be in writing to be enforceable.
QUESTION NO. 2: I have an agreement with another agent from a different brokerage to co-list the property. The seller has signed a listing agreement with both brokerages. However, we agents do not have a written agreement between ourselves regarding responsibility or compensation. How do you recommend we proceed?
ANSWER: It is important that the agents document their respective responsibilities, liabilities, and compensation. Therefore, BRM recommends the usage of its Inter-Office Co-Listing Agreement.
QUESTION NO. 3: I have a listing and would like an agent from another brokerage to hold the house open. Can I do so?
ANSWER: BRM discourages that practice for a number of reasons as set forth in a prior risk management tip. However, if agents are going to move forward in this regard, it is recommended that the agents/brokerages sign a co-listing agreement for the sole purpose of an open house. BRM has created that form, which is attached.
PRACTICE TIPS:
- Do not enter a co-listing agreement unless you have consulted with your manager.
- If you are co-listing a property with an agent from your brokerage, an Intra-Office Co-Listing Agreement should be executed. That form is attached. It is not necessary for the seller to review and approve that form as it is an internal document.
- If you have a listing agreement with a seller and another brokerage whereby the seller retains both brokerages to list the property, it is recommended that you have a co-listing agreement with that agent specifying the agent’s responsibilities, liabilities, and compensation. That Inter-Office Co-Listing Agreement should be reviewed and approved by the brokers. However, because the seller has listed the property with both agents, it is not necessary for the seller to review and approve that co-listing agreement.
- If you are a listing agent and are co-listing a property with an agent from a different brokerage and the seller has not signed a listing agreement with both brokerages, BRM recommends using the Inter-Office Co-Listing form between brokerages attached hereto.
Attachments:
Inter-Office Co-Listing Agreement
Intra-Office Co-Listing Agreement
Co-Listing Agreement for Open Houses between two brokerages
Co-Listing Agreement for Open Houses within same brokerage
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.