December 6, 2019
Often on the hotline we receive calls related to an agent switching brokerages. Let me address a couple of the most common questions.
What happens to the listing agreement or buyer broker agreement when and agent leaves the brokerage?
The agency agreement with the seller or buyer will remain with the agent’s former brokerage. While an agent is free to change brokerages, the UAR agency agreements specifically state that the Broker may assign another agent to represent the client.
May the listing agreement or buyer broker agreement be transferred to the agent’s new brokerage?
Simplest answer is no. There is nothing in the UAR agency agreements that allows for the brokerage to transfer the listing or buyer broker agreement to another brokerage. If the client wants to continue to work with agent at the agent’s new brokerage, then the former broker and client should terminate the agency agreement. Then the agent and client may enter into a new agency agreement with the new brokerage.
What if the client is already under contract and the agent switches brokerages before the property closes? How is the agent to get paid?
First, the agent should review their independent contractor’s agreement for clarification on payment of commissions and switching brokerages. Second, the agent’s former brokerage is still responsible for the client. Now, I recognize that mid-transaction the client is probably going to want to continue to work with the agent. However, the agency agreement is going to need to either be terminated or modified (adding the new brokerage to the agreement) to allow the agent and the new brokerage to represent the client.
Lastly, the former brokerage may pay the agent directly for work rendered while the agent was with the former brokerage. Again, the agent’s independent contractor agreement should give specifics as to when an agent earns their commission and how they will be paid.
Please feel free to call the legal hotline Monday, Wednesday, or Friday, if you have any agency related questions at 801-676-5211.