Multiple Choice Question: You are a buyer’s agent entering into a C.A.R. Buyer Representation and Broker Compensation Agreement (BRBC). What is the difference between an exclusive BRBC and a non-exclusive BRBC? Pick the best answer:

A. With an exclusive BRBC, you are the only agent representing the buyer, whereas with a non-exclusive BRBC, there could be other agents also representing the same buyer.
B. With an exclusive BRBC, compensation is payable if the buyer acquires a property described in the BRBC during your representation period, whereas with a non-exclusive BRBC, compensation is payable only if there was broker involvement with the property during your representation period.
C. With an exclusive BRBC, the buyer must give you a 30-day notice before cancelling, whereas with a non-exclusive BRBC, the buyer can cancel immediately.
D. All of the above. 

Answer: Answer A is not the best answer (so Answer D is wrong too). It’s true that we often use the word “exclusive” to mean “only.” However, that’s not really what “exclusive” means in the context of the BRBC (or the C.A.R. Residential Listing Agreement). After all, a buyer could have, for example, a BRBC with you for properties in Oxnard, but another BRBC with another agent for properties in Santa Barbara.

As for the exact same properties, a buyer under an exclusive BRBC is prohibited from entering “into another representation agreement in conflict with” your BRBC (see paragraph15A of the BRBC). But that still doesn’t mean you’re necessarily the “only” agent, given that the legal consequences of having another BRBC with another agent is merely that the buyer may owe compensation to that other broker, as well as to you (see paragraph 7A(3)).

Answer B is the correct answer. The word “exclusive” as used in the BRBC just means that compensation is payable to you if the buyer acquires a property as described in the BRBC during your representation period (see paragraph 4B(2) of the BRBC). For a non-exclusive BRBC, compensation is only payable if there is “Broker Involvement” (see paragraph 4B(1) of the BRBC). To have “Broker Involvement,” you have to have shown the property to the buyer, submitted an offer, or performed other services as a buyer’s agent (see paragraph 4B(4)). However, merely sending a list of properties to the buyer does not constitute “Broker Involvement.”

Answer C is wrong. It’s true that a buyer can only cancel an exclusive BRBC with a 30-day notice (see paragraph 2F of the BRBC). It’s also true that a non-exclusive BRBC defaults to an immediate cancellation “effective upon receipt” (see also paragraph 2F). However, you can check the box in paragraph 2F to change the immediate cancellation of a non-exclusive BRBC to require a notice of whatever number of days that you insert in the blank space provided.

-Thank You to Elizabeth Cuico (Ventura Office) for suggesting this week’s legal tip!

Copyright© 2024 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 September 9, 2024. 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. Written by Stella Ling, Esq.