(Insert
Name of Firm) follows the following policies, as they pertain to the payment of
commissions to licensed real estate agents, employed by (Insert Name of
Firm).
Ø (Insert Commission
Structure / Policy)
In
addition to the above-referenced office procedures, ALL employees of (insert
name of firm) will adhere to the following Virginia Real Estate Board Licensee
Regulations, as they pertain to Improper Brokerage Commissions.
***Please note the
change to 18 VAC 135-20-280 as they pertain to improper brokerage commissions.
The new regulations now clearly state that no agent is to receive any commission
related to a real estate transaction without prior consent of the principal
broker.***
They are as
follows:
“18 VAC 135-20-280. Improper brokerage
commission.
Actions resulting in an improper brokerage
commission or fee include:
1. Offering to pay or paying a commission or
other valuable consideration to any person for acts or services performed in
violation of Chapter 21 (§ 54.1-2100 et seq.) of Title 54.1 of the Code of
Virginia, or this chapter; provided, however, that referral fees and shared
commissions may be paid to any real estate entity licensed in this or another
jurisdiction, or to any referral entity in the United States, the members of
which are brokers licensed in this or another jurisdiction and which only
disburses commissions or referral fees to its licensed member
brokers;
2.
Accepting a commission or other valuable consideration, as a real estate
salesperson or associate broker, from any person except the licensee's principal
broker at the time of the transaction, for (i) the performance of any of the
acts specified in Chapter 21 (§ 54.1-2100 et seq.) of Title 54.1 of the Code of
Virginia or the regulations of the board or related to any real estate
transaction, without the consent of that broker; or (ii) the use of any
information about the property, the transaction or the parties to the
transaction, gained as a result of the performance of acts specified in Chapter
21 (§ 54.1-2100 et seq.) of Title 54.1 of the Code of Virginia without the
written consent of the principal broker. No licensee shall act as an employee
of a company providing real estate settlement services as defined in the Real
Estate Settlement Procedures Act, (12 U.S.C. 2601, et seq.) or pursuant to a
license issued by the Commonwealth of Virginia, to provide real estate
settlement services to clients or customers of the firm without written consent
of the broker.
3. Receiving a fee or portion thereof
including a referral fee or a commission or other valuable consideration for
services required by the terms of the real estate contract when such costs are
to be paid by either one or more principal(s) to the transaction unless such
fact is revealed in writing to the principal(s) prior to the time of ordering or
contracting for the services;
4. Offering or paying any money or other
valuable consideration for services required by the terms of the real estate
contract to any party other than the principals to a transaction which results
in a fee being paid to the licensee; without such fact being revealed in writing
to the principal(s) prior to the time of ordering or contracting for the
services;
5. Making a listing contract or lease which
provides for a "net" return to the seller/lessor, leaving the licensee free to
sell or lease the property at any price he can obtain in excess of the "net"
price named by the seller/lessor; and
6. Charging money or other valuable
consideration to or accepting or receiving money or other valuable consideration
from any person or entity other than the licensee's client for expenditures made
on behalf of that client without the written consent of the
client.”
In
addition to the above-referenced provisions within the Virginia Real Estate
Board Regulations, ALL employees of (insert name of firm) will adhere to the
following REALTOR® Code of Ethics, as they pertain to Commissions.
They are
as follows:
“Article
3
REALTORS® shall cooperate
with other brokers except when cooperation is not in the client's best interest.
The obligation to cooperate does not include the obligation to share
commissions, fees, or to otherwise compensate another broker. (Amended
1/95)
· Standard of
Practice 3-1
REALTORS®, acting as exclusive agents or brokers of
sellers/ landlords, establish the terms and conditions of offers to cooperate.
Unless expressly indicated in offers to cooperate, cooperating brokers may not
assume that the offer of cooperation includes an offer of compensation. Terms of
compensation, if any, shall be ascertained by cooperating brokers before
beginning efforts to accept the offer of cooperation. (Amended
1/99)
· Standard of
Practice 3-2
REALTORS® shall, with respect to offers of compensation
to another REALTOR®, timely communicate any change of compensation for
cooperative services to the other REALTOR® prior to the time such REALTOR®
produces an offer to purchase/lease the property.
(Amended
1/94)
· Standard of
Practice 3-3
Standard of Practice 3-2 does not preclude the listing
broker and cooperating broker from entering into an agreement to change
cooperative compensation. (Adopted 1/94)
· Standard of
Practice 3-4
REALTORS®, acting as listing brokers, have an
affirmative obligation to disclose the existence of dual or variable rate
commission arrangements (i.e., listings where one amount of commission is
payable if the listing broker's firm is the procuring cause of sale/lease and a
different amount of commission is payable if the sale/lease results through the
efforts of the seller/landlord or a cooperating broker). The listing broker
shall, as soon as practical, disclose the existence of such arrangements to
potential cooperating brokers and shall, in response to inquiries from
cooperating brokers, disclose the differential that would result in a
cooperative transaction or in a sale/lease that results through the efforts of
the seller/landlord. If the cooperating broker is a buyer/tenant representative,
the buyer/tenant representative must disclose such information to their client
before the client makes an offer to purchase or lease. (Amended
1/02)
· Standard of
Practice 3-5
It is the obligation of subagents to promptly disclose
all pertinent facts to the principal's agent prior to as well as after a
purchase or lease agreement is executed. (Amended 1/93)
· Standard of
Practice 3-6
REALTORS® shall disclose the existence of an accepted
offer to any broker seeking cooperation. (Adopted 5/86)”
AND
“ Article 6
REALTORS® shall not accept any
commission, rebate, or profit on expenditures made for their client, without the
client's knowledge and consent.
When recommending real estate products or
services (e.g., homeowner's insurance, warranty programs, mortgage financing,
title insurance, etc.), REALTORS® shall disclose to the client or customer to
whom the recommendation is made any financial benefits or fees, other than real
estate referral fees, the REALTOR® or REALTOR®'s firm may receive as a direct
result of such recommendation. (Amended 1/99)
· Standard of
Practice 6-1
REALTORS® shall not recommend or suggest to a client or
a customer the use of services of another organization or business entity in
which they have a direct interest without disclosing such interest at the time
of the recommendation or suggestion. (Amended 5/88)
Article 7
In a transaction, REALTORS® shall not
accept compensation from more than one party, even if permitted by law, without
disclosure to all parties and the informed consent of the REALTOR®'s client or
clients. (Amended 1/93)”