Changing Firms Mid-Transaction, and a Referral Fee for an Unlicensed Friend
Broker Tanya has a buyer agency agreement with Wes and Nina, dated May 1 and running through October 31, signed on behalf of Summit Realty, where she is affiliated. On June 10 Tanya resigns from Summit and joins Bluewater Realty. Wes and Nina want Tanya to keep helping them; they are under contract on a home they found June 5, closing July 20, with $5,000 earnest money held by the listing firm and a $1,500 due diligence fee already paid to the seller. Separately, Tanya's friend Regina holds no real estate license, has been sending Tanya buyer leads, and wants 25% of Tanya's commission on any closing, paid from the brokerage's check at settlement.
1. Who is the party to the buyer agency agreement now, who is entitled to be paid when the July 20 sale closes, and what must happen before Tanya can continue working with Wes and Nina?
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The firm is the party, not Tanya. The agreement was signed on behalf of Summit Realty; the agency relationship and the right to compensation belong to Summit. Tanya's departure does not transfer the buyers, the agreement, or the fee to Bluewater.
The pending sale. It is serviced and paid through Summit unless and until something changes in writing. Tanya's own split of that fee is governed by her independent contractor agreement with Summit, which survives her departure as that agreement provides; she cannot collect Summit's side of the fee through Bluewater, and she cannot collect twice.
Before she can act for Wes and Nina at Bluewater: the buyers must terminate or Summit must release them from the existing agreement in writing, and they must then sign a new buyer agency agreement with Bluewater. All three - Summit, Bluewater, and the buyers - should be told in writing, and the buyers must understand they are not obliged to follow Tanya and that Summit may continue to serve them. Until that happens, Tanya is a licensee at a firm that does not represent these buyers, and taking direction from them or negotiating on their behalf is a representation problem.
Also check: whether the buyer agency agreement itself contains a protection period or a fee clause that survives termination - read it before advising, not after.
2. May the brokerage pay Regina 25% of Tanya's commission at closing? Explain the rule, the risk, and what lawful alternatives exist.
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No. Sharing compensation for brokerage services with an unlicensed person is prohibited. Regina's lead generation is not clerical help; a percentage-of-commission referral fee paid on a closed transaction is a share of a brokerage fee for producing a client, and a license is required. The fact that the payment would come from the firm's check 'at closing' makes it worse, not better: it would be documented on the settlement statement as an unexplained payout to a non-licensee, which is the easiest paper trail in the world to follow.
Who is exposed. The firm that pays, the broker-in-charge who authorizes it, and Tanya, who arranged it. Discipline can reach the firm's license, and the payment does not become legal because the client consented or the amount is small.
Lawful alternatives. Pay a licensed cooperating firm according to a written cooperation agreement. Pay a licensed broker who actually did the work through their firm. Give Regina a fixed, modest gift or a non-contingent payment for genuinely non-brokerage marketing services at fair value - not a share of the fee and not tied to a closing. Or have Regina get licensed.
Conversation to have: tell Regina plainly now, before the July 20 closing, not after the settlement statement has been prepared.
3. Tanya wants to move the pending buyers' file to Bluewater. What may she take, what may she not, and how should the pending contract be handled?
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What belongs to Summit. Transaction records, the buyer agency agreement, correspondence, and the file are the firm's records and are kept under the broker-in-charge's control. Tanya may not walk out with the file, and she may not copy confidential client information for her new firm's use.
What she may know. General knowledge and skill go with the broker; specific confidential information about Wes and Nina - their finances, motivation, maximum price - does not travel to a firm they have not hired.
The pending contract. It is between the buyers and the seller; a change of the buyers' brokerage does not change the contract, the earnest money holder, the due diligence fee already paid, or the closing date. Until the buyers are properly released and re-signed, Summit services the file: Summit's broker-in-charge should be told in writing what is happening and who will attend inspections and the closing. The earnest money at the listing firm is untouched, and the $1,500 due diligence fee has already been earned by the seller.
The sequence that avoids trouble: written release from Summit → written notice to the listing firm of who now represents the buyers → new Bluewater buyer agency agreement → amended buyer-agent designation in the transaction file. Skipping the first step and simply showing up at the July 20 closing as Bluewater's broker is the version of this that ends in a Commission complaint.