Hello,

I have recently had issues with my broker.
I have now a 80/20% (with no office fees) commission split, and to be able to go "back" to 100% commission based (with monthly office fees), I have to do 4 transactions with the broker. If an agent dislikes it, he can leave the broker with $2500 fees.

I was owing multiple months of office fees due to slow market and tight budget and we agreed that I am to pay them with E&O at the first deal closing.


I asked my broker if he can change it to 100% without 4 transactions, and after a series of email exchanges with him he agreed to it under the condition that I should pay 1 year of office fees in advance at the first deal closing.

I closed the first deal a few days ago. The broker charged me $2500 in addition to the multiple months of late office fees with late charges. On top of them, I am to pay office fees separately monthly starting next month. My commission was reduced closed to half the full commission and I am now in shock.

For reference, we had an agreement months ago that an agent can only switch to 100% after 4 deals and in the event of leaving the broker, an agent should pay $2500 penalty.

On the series of the email exchanges we have had, he never mentioned about this original agreement about 4 deals for switching and $2500 penalty for leaving we had months ago on the email messages we.

I didn't even say I will leave but he still charged $2500. He said that he charged leaving panalty because I broke the agreement anyway. And he cannot do anything about it because the accountants are handling it.

My question for you guys is: Is email bound to the law, any law, that he is obligated to keep the promise he made?

He never explains about our email deal on paying 1 year of office fees in order to switch to 100% commission.

You really ought to seek this legal advice from your Attorney.

Meanwhile, keep the email.

The following is the email exchanges with my broker:
*I edited the names.

After a few email exchanges about switching, I replied when my broker said he should asked the lawyers about it.

>>> Tom (my broker),
>>>
>>> Did you ask the lawyers about my changing commission option?
>>>
>>> Thanks for your kind consideration in advance.
>>>
>>>Chris (me).

-------------
Chris,
>>> They
will consider it but you will have to pay monthly again!!

Tom
>>>

-------------
>>
>> Tom,
>>
>> Thank you for your consideration.
>>
>> I will certainly pay monthly.
>>
>> Thank you again.
>>
>> by the way, don't I need to sign any paper for this?
>>
>> Chris

--------------
Chris,

>>> After you pay the full year they will draw another contract with monthly payments. Are you going to pay now or wait until you close?

Tom

-----------

Tom,

> I can't pay now.
> I will wait till one deal closes.
>
> So in essence, I should pay the full year in advance in order to
> return to a monthly option. Right?
> I think I can do that.
>
> Thanks.
>
> Chris

--------
Chris,

Right!!

Tom


--------------
--------------
And then Tom charged me $2500 leaving penalty "and" late office fees with late charges. No mention about 1 year payment of office fees deal.

I agree, you should consult the advice of a real estate attorney in your state. I don't know what to think. I hope it all works out for you!

PA has a real estate legal hotline for agents to call and ask questions of an attorney. Maybe Virginia does too.

Usually you have some kind of signed agreement with the broker covering the compensation, costs and splits.
I would think in my non-attorney capacity that the written agreement would rule and that any verbal or email changes would have to be memorialized.

I can't find one in Virginia.

I think I have to go through that route and is there anyone here having a good idea what to do at this point?

Will this solve my problems?
http://www.varealtor.com/legalhotline

Probably won't "solve" them; but that's a good start.

Your situation is very difficult to clearly explain . . . . and to follow.

personally, I would leave that broker, and I would not pay him anything more out of my pocket. He's trying to buffalo you. If he wants to litigate the matter, let him. he probably won't. cut your losses and go.

It is I who have to sue. My commission was cut in half due to this already.

email exchanges can constitute a binding agreement, but the circumstances are important. you'll need to consult with an attorney.

you should have a copy of the initial agreement you had with the broker. if you don't, demand it from the broker. If he has breached the agreement by charging you the $2500, inform him that he is in breach, and must return the money to you immediately, before you leave. it appears that he charged the $2500 in anticipation of your departure, which would be a breach of the agreement.


no legal advice

I sent email to hotline@varealtor.com.

I think you'll have to do a whole lot more than that.

Your situation is way too complicated, and the passages you supplied from some email above, are too difficult to follow . . . . and that is coming from someone who wanted to understand. Plan on getting on the phone, and then provide copies of ALL of the documentation leading up to the current state of affairs, including your Independent Contractor Agreement.

I doubt that anyone from your State Real Estate Commission or REALTORŪ Organization is going to come to your aid; but they may do some pro bono work to help you determine whether you have a case worth fighting.

In the end, you will have to retain Counsel to fight on your behalf. Sometimes a mere note to the opposing party, written on some Esquire's Letterhead, is sufficient to get satisfaction.

My read of your earlier recitation of events, when your Broker said it's in the hands of the Attorney (or was it Accountants?) is just a ploy to avoid getting embroiled in these issues with you directly, and to defer the responsibility onto these other individuals . . . . I do that myself. It's called appealing to authority, and it works with most people !

But this hotline is for brokers only, isn't it?
Could anyone check it? http://www.varealtor.com/legalhotline

First, find another broker immediately. You will not be able to work with this one.

Second, contact your local association, the one you and your broker belong to. Ask them for the procedure to settle disputes. You may be required to go through mediation. If not, go to small claims court. This is not enough money to hire an attorney over.

Thank you for your information.

I will follow your methods.

I assume Virginia is like most states, the real estate commissions's job is to protect the public. They may or may not get involved with what appears to be a compensation dispute. I know in our state they would tell you that compensation disputes are not part of the real estate laws.

Ditto here. Commission disputes would more likely be mediated/arbitrated through our local AORs.

Take him to Judge Judy, so allows emails and texts.

I like the advice, change brokers, and go to small claims. I can't count the number of great agents I ended up with because of their having a broker of this type. And Judge Judy usually gets her "quests" from small claims court filings. Or just write it up as another course completed at the U of Hard Knocks and move on.

As for most associations they are usually useless when it comes to settling commission disputes between a broker and one of his/her own agents. Not considered a board related item. Between brokerages yes, internal at a brokerage no.

One question, why no face to face sit-down and getting a written memo of the agreement at the time? You live in different counties?

Reminds me of the new breed. A young women received a text message on her cell phone and made a comment as I was sitting next to her, I said do you know her well, and she said yes she is one of my best friends. I said you must have a good time on your girl night outs. She said Oh, I have never met her in person yet. I said how long have you two been friends, her answer 4 years. I guess I'm still stuck in the 50's.

I have several very good friends whom I have not met in person yet.

What perly said.