Property Broker Commission Agreement

The Property Broker Commission Agreement is a legal document that establishes the terms and conditions between the owner of a property and a broker who will act as the exclusive sales agent for the property. The agreement highlights the importance of engaging the broker's services and outlines the responsibilities and obligations of both parties.

 

The document begins with a detailed introduction, stating the names and principal places of business of the owner and the broker. It explains that the owner owns a property and wishes to engage the broker as the sole and exclusive sales agent for the property. The broker, who is engaged in the business of leasing and marketing properties, desires to accept this employment.

 

The agreement is divided into several sections, each addressing specific aspects of the agreement. The first section, Article 1, focuses on the term and termination of the agreement. It states that the agent's duties and responsibilities will begin on the current date and end on a specified end date, unless terminated earlier by either party with a 30-day written notice. It also outlines the commissions payable to the agent for any new leases, lease expansions, relocations, renewals, extensions, and other transactions executed within nine months following the expiration or termination of the agreement.

 

Article 2 of the agreement covers the services to be provided by the broker. It states that the broker will act as the exclusive broker for leasing and/or selling any or all space in the building on the property. The broker will perform the services in accordance with applicable professional standards and will be responsible for preparing a marketing plan and budget, advertising the property, and coordinating with cooperating brokers. The owner will refer all inquiries to the broker and conduct all negotiations through the broker.

 

The agreement also addresses other important matters such as sale expenses, security deposits, technical matters, indemnification, compensation, notices, confidentiality, limited liability, and general provisions. It includes provisions for attorney's fees, non-discrimination, survival of certain provisions after termination, and the sale of the property.

 

Overall, the Property Broker Commission Agreement is a comprehensive document that clearly defines the rights and obligations of both the owner and the broker in a property sales transaction. It ensures that both parties are aware of their responsibilities and provides a framework for a successful business relationship.

How to use this document?

1. Engage the broker: Enter into a written agreement with the broker, clearly stating the names and principal places of business of both parties. This ensures that both parties are identified and bound by the terms of the agreement.

2. Specify the term and termination: Clearly define the initial term of the agreement and the conditions for termination. This allows both parties to understand the duration of the agreement and the circumstances under which it can be terminated.

3. Determine the commissions: Agree on the commissions payable to the broker for new leases, lease expansions, and other transactions. This ensures that both parties are aware of the compensation structure and can avoid any disputes.

4. Define the services: Clearly outline the services to be provided by the broker, including marketing, advertising, and negotiations. This ensures that both parties understand the scope of work and can set appropriate expectations.

5. Address other important matters: Discuss and agree on other important matters such as sale expenses, security deposits, technical matters, indemnification, and compensation. This ensures that both parties are aware of their rights and obligations and can avoid any misunderstandings.

6. Follow legal requirements: Ensure compliance with applicable laws and regulations, including non-discrimination laws. This ensures that the agreement is legally enforceable and protects both parties from any legal liabilities.

7. Seek legal advice if needed: If you have any doubts or concerns about the agreement, consult with a legal professional to ensure that your rights and interests are protected.

8. Keep records: Maintain accurate records of all transactions and communications related to the agreement. This will help in case of any disputes or misunderstandings in the future.

9. Review and update the agreement: Periodically review the agreement to ensure that it remains relevant and reflects any changes in the business relationship. Update the agreement as necessary to address any new requirements or circumstances.

10. Terminate the agreement if necessary: If the business relationship is no longer beneficial or if there are significant issues or breaches of the agreement, consider terminating the agreement in accordance with the termination provisions. Seek legal advice if needed to ensure a smooth termination process.