Hi everyone, i have an outgoing issue with my former broker who decided on his own that he deserves half of my commission for himself. Here is the story. I was hired by the firm on 2/11/2009 , it is a franchise of a national company. My contract was for one year, but after the contract expired i continued working under the same terms( i was paying same fees and etc.)The day after my contract expired i was hired by a seller to sell her home. I found the buyer during one of my open houses and i put the deal pending. I gave up 2.5 percent of the commission so i can make everyone happy and so i can put this deal together. I represented both sides. I placed the status pending on this deal and i was present at home inspection as well. I drew up the home inspection request form and that is when i email my broker advising him that I'm having extremely hard time communicating with the seller and I'm giving up on her so i asked for help. I told him the deal is pending , home inspection perform all what was left is the appraisal and closing. He stepped in and never asked for any compensation from me, never asked me for a referral fee. He did tell me clearly to stay with the buyer and he will communicate with seller ,which i did. After a week me and my broker had an argument and he fired me. The co-owner of the firm is my friend ,she came over to my house to assure me that i will receive my commission check per agreement split is 80/20. Just prior closing i email title company for broker's demand and i didn't see my name on it so i called the former broker to make sure I'm getting compensated. Well he say that he had decided to keep 40% of my 80% split. He refuses to meet with me to explain how much work has he done after the deal was handed pending to him. He is claiming that he had done a lot of work, but refuses to share with me. He said that he "rescued the deal". Now i had to the franchise corporate and i told them what I'm facing and that i didn't want us to go to court. I told them that I'm willing to offer him 20% referral fee ,but he didn't agree. It gets even better. After closing he sends me 20% of my 80% and he says that he is keeping 20 % for him and for the rest since i already threatened to go to arbitration i should proceed with it. My commission is hostage with this very bitter former broker. Anyone out there faced anything like this? Thank you for your help in advance.

Locally, It is my understanding that the brokerage firm owns all listings and is entitled to all agreed compensation in relation to the successful completion of a real estate transaction.

For clarifacation, where you state that the seller hired you, would appear to be legally inaccurate as the seller actually hired the brokerage firm, which you simply represented at that point in time.

Locally, brokerage firms may stipulate in their policy, that if a sales representative unilaterally decides to reduce the commission due on the successful completion of a transaction, that the reduction in question is taken from the representatives portion of the commission.

(In other words you cannot give away any part of the brokerage firms portion of the commission, only your own)

Locally there is generally policy that unless there is an express agreement to the contrary, it shall be assumed that two representatives working together in the same transaction will share the compensation earned equally on a 50/50 basis.

Further, that in the event that there is an express agreement between the representatives then all such agreements are subject to the approval of the principal broker of the brokerage firm.

These policies were developed to maintain harmony among all the representatives of the firm and avoid disruptive disputes over commission sharing.

If the accepted premiss is that the brokerage firm owns all the listings, then that would indicate that you are not in a position to offer to share anything that you do not legally own and are entitled to share.

Consider the position of an adjudicator of an arbitration hearing who must base their findings on the letter of the law and the law of equity.

The law of equity relates to being fair and impartial and which an adjudicator when weighing all the facts as may be involved in your particullar situation and depending upon the general practice of other brokerage firms in your jurisdiction, (legal precedents) and regarding the same issues may find in your favour.

Prior to taking any action, one might consider making a reasonable offer of settlement, in writing,of an equal split of the 80% commission and which might be found acceptable and still leave you with 40% of the earned commission and 20% more than what you have received to date.

Adjudicators have a tendency to believe that the party who rejects a reasonable offer of settlement are in fact being unreasonable and may render their decision accordingly.

Important Notice: This information is provided as basic educational information by the author and is not a substitute for the advice of an expert and/or the advice of a lawyer. There is NO representation as to legality, accuracy, correctness of the herein information and the reader is strongly urged to consult a lawyer in the relevant jurisdiction to ensure accuracy before acting on this information.