The lesson of the Westside case is simple: if you are a real estate agent in California, make sure you receive your commission agreement in writing. Agreements between agents for the allocation of commissions may be applicable even if the agents are linked to different brokers. Of course, the best practice is to cut all commission or transfer fee agreements to the letter. This protects both parties to the agreement. The partner, who did not receive his share of the commission, filed a complaint to recover his half of the commission. The broker who received the commission argued that the action should be dismissed because section 10137 of the Trades and Professions Code provides that it is illegal for a real estate agent to accept compensation from a person other than the real estate agent under whom he is authorized, making it illegal to enter into the agreement with his former partner. Despite this current legislation, the Court of Appeal found that (1) a broker may share commissions with an unlicensed investor on the transaction because the client does not perform deeds requiring a real estate licence; (2) where an unlicensed person performs both activities requiring a licence and activities that do not require a licence, he may be recovered for unlicensed activities, if that part of the contract is dissociable and if the separate part of the agreement is subject to a separate legal consideration; and (3) the obligation to enter into commission agreements in writing with a client does not preclu her collection by an agent of commissions due to an agent under an oral contract with another licensed agent or broker. Anyone can save with Clever on brokerage commissions. Call us today at 1-833-2-CLEVER or fill out our online form to get started.
As the name of this compensation model suggests, the agent receives the entire commission. This model pays 100% to the agent because the agent pays office fees or monthly office fees. This can be a pretty steep performance each month, but experienced producers prefer it because their costs are capped when their income is not. In 2014, James and Eleanor Randall told their friend Stephen Shapiro that they wanted to buy a house in Los Angeles. Shapiro was a real estate agent and the head of the Westside Real Estate Agency, Inc. Shapiro agreed to represent the Randalls, but their agreement was never reduced to the letter. Some of the significant franchises charge a percentage of the “top” fee of each commission to their franchised brokerage agents. These fees could come from the commission before the broker receives it and shares with the agent.