Can I share a commission with a lawyer?

QUESTION: I’ve gotten an offer on one of my listings from a buyer who is a licensed North Carolina attorney.  The offer includes a provision that the listing firm will pay the buyer a fee equal to the amount offered in MLS to cooperating brokers.  I told the buyer/attorney that my firm was prohibited from sharing a brokerage fee with her unless she had a real estate license, and that in any event I couldn’t present an offer containing a provision concerning the payment of a brokerage fee.  The buyer/attorney said that it was permissible for her to be paid a brokerage fee because attorneys are exempt from the real estate license law.  Who is right?

ANSWER: Your firm can, in its discretion, share its commission with the buyer/attorney, but not for the reason she suggests.  It’s true that there is an exemption in the real estate license law for acts or services performed by an NC-licensed attorney, but the exemption is limited to those acts or services that constitute the practice of law. An attorney who makes an offer to purchase real estate for himself or herself is not engaged in the practice of law.  However, the Real Estate Commission has long taken the position that it is permissible for a broker to share a commission with an individual who is buying or selling real estate on his or her account since he or she does not have to have a real estate license to do so.  Thus, your firm can share its commission with the buyer/attorney, not because she is an attorney, but because she is a principal in the transaction.  However, since she is not a member of your MLS, you are under no obligation to share your commission with her simply because she asks.

Regarding the inclusion of a provision in the Offer to Purchase and Contract regarding the payment of a brokerage fee, Real Estate Commission Rule 58A.0112 prohibits a broker from using a preprinted offer or sales contract form containing a provision concerning the payment of a commission to any broker or firm.  However, the Rule goes on to provide that it does not prohibit a buyer or seller from altering, amending or deleting any provision in a form offer to purchase or contract.  Thus, there is nothing to prohibit the buyer herself from adding a provision to the standard Offer to Purchase and Contract concerning the payment of a brokerage fee, and you must present the offer.

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Filed Under: Fees/Commissions,