December 30th, 2024 at 2:38 pm
Multiple Choice Question: Can you cancel the BRBC with respect to this particular property? Pick the best answer:
A. Yes, by mutual agreement only.
B. Yes, but the buyers can proceed with the purchase of this property without your representation.
C. No, because you have a fiduciary duty to act in the buyers’ best interest.
D. No, because the buyers must buy something else.
Answer: Answer A is wrong. If the box in paragraph 2G(2) of the BRBC is checked, the BRBC agreement is contingent upon the seller (or others) agreeing to pay your 2.5% coop comp. If, as in this situation, no one will pay you, you have the right to unilaterally cancel the BRBC with respect to this particular property (see paragraph 9B(2)(B) of the BRBC). To cancel, use the Cancellation of Buyer Representation (COBR), which was recently revised for cancelling for one property only as needed (see paragraph 2C(2) of the COBR). You should also use a Cancellation of Agency Confirmation (CAC) to inform the seller and listing agent for this particular property.
Answer B is the correct answer. Checking the box in paragraph 2G(2) of the BRBC is a very risky proposition for buyers’ agents! Do not check that box unless you fully understand the possible consequences. By checking the box, you can cancel the BRBC with respect to this particular property, given that no one will pay you. However, the buyers can proceed with buying this property without your representation (see paragraph 9B(2)(B) of the BRBC). Once you cancel, the buyers could even end up asking the listing agent or someone else to represent them for this property.
Answer C is wrong. Checking the box in paragraph 2G(2) allows you to cancel if no one will pay you. The checkbox protects you from being forced to work for the buyers for free.
Answer D is wrong. Although the BRBC protects you from working for free, the agreement does not force the buyers to buy something else.
-Thank You to Clara Eisenman (Tustin Manager) for suggesting this week’s legal tip!
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