Section 8.0: Dual or Variable Rate Arrangements
Posted by PRO Thu, 23 Mar 2006 17:29:00 GMT
The listing broker has an affirmative obligation to disclose the existence of a dual- or variable-rate commission arrangement.
Dual or variable commission arrangements occur on listings in which the seller/landlord agrees:
- To pay a specified commission if the property is sold/leased by the listing broker without assistance and a different commission if the sale/lease results through the efforts of a cooperating broker; or
- one in which the seller/landlord agrees to pay a specified commission if the property is sold/leased by the listing broker either with or without the assistance of a cooperating broker and a different commission if the sale/lease results through the efforts of a seller/landlord.
Participants must disclose these arrangements to all other Participants via the Special Listing Type field in the MLS.
The listing Participant must disclose the existence of such arrangements to potential cooperating brokers. The listing Participant shall, in response to inquiries from cooperating brokers, disclose the differential that will result in either a cooperative transaction or in a sale/lease that results through the efforts of the seller/landlord.
If the cooperating broker is a buyer/tenant representative, the cooperating broker must disclose the information to the buyer before the buyer makes an offer to purchase or lease.
| Dual-Rate Example: | Broker A lists a property with a 15 percent commission in a dual commission arrangement. The seller agrees to pay Broker A only a 10 percent commission if the seller finds the buyer. The differential to disclose is 5 percent. |
| Variable-Rate Example: |
Broker A lists a property with a 15 percent commission payable by the seller if another broker brings the buyer. The seller will pay the listing broker 10 percent commission if the property is sold by the broker’s own company (in-house) and will only pay 5 percent commission if the seller finds the buyer. The differential to disclose is 5 percent and 10 percent: 5 percent difference between a co-op sale and an in-house sale and 10 percent difference between a co-op sale and a sale assisted by the seller. |
The following violation is subject to the Progressive Fine and Rules Schedule as stated in Section 10.1:
 |
Failing to disclose a Variable Rate or Dual Rate commission arrangement. |
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