December 4th, 2022 at 7:36 pm
Multiple Choice Question: What is the meaning of the unchecked boxes and blank spaces in paragraph 3D(1) of the RLA? Pick the best answer:
A. The listing agent will offer “zero” in the MLS.
B. The listing will be excluded from the MLS.
C. The listing agent will offer whatever the listing agent deems to be appropriate.
D. The listing agent will offer a reasonable amount.
Answer: Answer A is unlikely to be the best answer. It’s true that a blank space may look more or less like a “zero.” However, it seems unlikely that a listing agent and seller would intend for the MLS offer of compensation to be “zero.” Even the MLS rules prohibit the offer of compensation to be “zero.”
Answer B is also unlikely to be the best answer. Paragraph 7D of the RLA specifically addresses whether a listing will be included in or excluded from the MLS. It would be difficult for the listing agent to successfully argue that the failure to fill in the boxes and blank spaces in paragraph 3D(1) means that the listing will be excluded from the MLS, when paragraph 7D directly addresses that issue.
Answer C is also unlikely to be the best answer. Answer C is a bit of a stretch. Paragraph 3D(1) addresses what the seller authorizes the listing agent to compensate a cooperating broker through the MLS. It would be difficult for a listing agent to successfully argue that the failure to fill in the boxes and blank spaces means that the listing agent can do whatever he or she pleases.
Answer D is likely to be the best answer. When faced with an ambiguous contractual provision, such as the unchecked boxes and blank spaces in paragraph 3D(1), a judge or arbitrator is likely to consider what would be reasonable under the circumstances.
However, as the listing agent, you would not want paragraph 3D(1) to be ambiguous. If, for example, the property doesn’t sell right away, you would not want the seller to claim that it’s your fault for not offering more compensation through the MLS. Best practices clearly dictate that you fill out paragraph 3D(1) when you take a listing.
-Thank You to Nelson White (Director of Training and Compliance) for suggesting this week’s legal tip!
Like what you see here? Sign up for more! Our free e-newsletter informs you of listings in your community, insider real estate tips, the latest in home trends, and more.
