How Much Do We Get?

October 7th, 2019 at 7:09 pm

Question: I am the listing agent for a lease. Our compensation is 6% of the total rent for the lease term to be split 50-50 with a tenant’s agent. As it turns out, we are now putting together a lease where the tenant is representing himself. There is no tenant’s agent. What is our compensation under these circumstances? 

Answer: The answer depends entirely on your listing agreement with the landlord. If, for example, you used C.A.R.’s Lease Listing Agreement (LL), your compensation should be 6%. The reason is paragraph 3A of the listing agreement states that you will receive 6% “irrespective of agency relationship(s).” Hence, you are entitled to receive the entire compensation for procuring a tenant, regardless of whether the tenant is represented by an agent. The contractual provision that says that you will split the compensation 50-50 with a cooperating broker is merely an authorization for you to do that, not a requirement (see paragraph 3F(1)). This language in the Lease Listing Agreement is also generally used for C.A.R.’s other standard-form listing agreements as well.

–Thank you to Joe Rivello (Newport Beach Office) for suggesting this week’s legal tip.

Copyright© 2019 Berkshire Hathaway HomeServices California Properties (BHHSCP). All rights reserved. Any unauthorized reproduction or use of this material is strictly prohibited. This information is believed to be accurate as of October 7, 2019. It is not intended as a substitute for legal advice in individual situations, and is not intended to nor does it create a standard of care for real estate professionals.

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