Brokerage Fee Provision in Contract Form

QUESTION: I have been representing a bank that gives my firm listings on properties that the bank has foreclosed on. The bank recently provided me with a new sales  contract form that the bank insists be used to put its listings under contract. The contract form has a provision regarding the payment of real estate brokerage commissions.

I know that the Real Estate Commission has a rule that does not allow licensees to use a preprinted sales contract form that has a provision about the payment of a  commission to a real estate agent or firm. Would that rule also apply to this case, where the bank has provided the contract form?

ANSWER: You are correct that Real Estate Commission rule 58A.0112 prohibits licensees from using preprinted sales contract forms that contain any provision concerning  the payment of a commission to any broker or firm. The rule also prohibits licensees from inserting such a provision into a preprinted form, even if directed to do so by a party, or suggesting to a party that he or she add such a provision. However, the rule does not limit the ability of a buyer or seller from contracting to buy and sell real estate on  whatever contract form they may desire to use. Thus, if the contract form is provided by the bank rather than you, it would not be a violation of the rule for you to use it to put  the bank’s properties under contract.

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