Representing a client after agency agreement expires

QUESTION: I have an agent who has marketed a listing for a very long time for a rather difficult seller. The listing is now under contract with a closing date of October 3. The listing agreement expires on September 30and the seller does not want to extend the listing. I know that it’s okay to leave the listing in place in our MLS, and that we would have to withdraw it within 2 business days if it does not close and has to go back on the market. My question is, where would the Real Estate Commission stand on this matter? I’m concerned that if my agent continues working for the seller after the listing expires, it might violate the law.

ANSWER: Based on conversations we’ve had in the past with the Real Estate Commission’s legal staff, we do not think you need to be concerned. It is true that Real Estate Commission Rule 58A.0104 requires agreements for brokerage services to be in writing. An agent who continues to perform brokerage services for a buyer, seller, landlord or tenant after the brokerage agreement with the client expires arguably is engaging in real estate brokerage services without a written agreement. However, the Real Estate Commission takes the pragmatic view that the expiration of the agency agreement should not preclude the agent from continuing to represent the client in order to wrap up a transaction contemplated by the agency agreement that is nearly concluded at the time the agency agreement expires. Since the transaction your agent is involved in is hopefully closing just three days after the listing agreement expires, you agent can and should continue to represent the seller.

On the other hand, if there’s a significant lapse in time between the expiration of the agency agreement and the conclusion of a transaction that was “in the works” at the time the agreement expired, the Commission may well view the matter differently. An example would be if a listing agreement expired shortly after a buyer and seller entered into a lease-purchase agreement with an agreed-upon settlement date in six months. It would be problematic for the listing agent in such a situation to continue providing brokerage services to the seller without getting a written extension of the listing agreement.

Whether it is appropriate in a given situation for an agent to continue to provide real estate brokerage services after the brokerage agreement expires will depend on the particular facts of that situation.

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