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Irwin Law
Irwin Law, Attorney
Category: Legal
Satisfied Customers: 6855
Experience:  Lawyer & Real Estate Broker, 30+ years, foreclosure, land contracts, inheritance, probate.
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Commercial building 5+ unit multifamily sale commission

Customer Question

Commercial building 5+ unit multifamily sale commission disclosure questions on Northern California saleWe are closing an apartment sale using a dual agent. Where is the commission listed aside from the listing agreement? Shouldn't the commission percentages be stated on the purchase sales agreements especially in a dual agency situation? Also, where is the agent required to disclose any credits from their commission back to the seller? How should those credits be listed on the closing statement by law? per the DRE?
Submitted: 16 days ago.
Category: Legal
Expert:  Irwin Law replied 15 days ago.

Shouldn't the commission percentages be stated on the purchase sales agreements especially in a dual agency situation?

ANSWER: Actually no. Most state real estate commissions have rules that prevent disclosure of commission details in the purchase agreement itself. In California, the dual agency disclosure document is required. See: http://www.cdmproperties.net/forms/listing-forms.pdf . ALSO SEE: http://www.msrlegal.com/article/legal-update-commercial-real-estate-brokers-now-subject-to-the-same-dual-agency-and-disclosure-laws-as-residential-brokers/

If there are side agreements outside of the standard listing contract there's must be covered by a separate agreement between the Realtor and the seller.

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Customer: replied 15 days ago.
Are emails considered a contract if there is disagreement? We did get a dual agency disclosure.Can you address the questions about the closing statement disclosures?
Expert:  Irwin Law replied 15 days ago.

Emails can serve as both evidence and a contract under certain circumstances. I'm not sure what you mean about "closing statement disclosures". Sometimes the question and answer format here can be supplemented by our premium service which I will offer you for telephone conference on the subject.

Customer: replied 15 days ago.
The links you provided didn't work. Can you confirm that is the information you wanted to send me? Thank you!
Expert:  Irwin Law replied 15 days ago.

http://www.msrlegal.com/article/legal-update-commercial-real-estate-brokers-now-subject-to-the-same-dual-agency-and-disclosure-laws-as-residential-brokers/

This URL opens to a lawyer's blog on the dual agency question. You say that you were given the dual agency form, so I am not sending that one again.

Customer: replied 15 days ago.
As of closing, we have nothing in writing from the buyer that states they have received any notice or have any knowledge of a referral fee being given back to the seller. We've asked for the dual agent to add this to the closing statement. What else should I do as a broker to protect my license and honestly disclose the referral fee the seller is getting get on this? Thank you!
Expert:  Irwin Law replied 15 days ago.

Of course the payment of commissions from the sellers gross proceeds must be shown on the closing statement. If there is something more to the agreement which is to be performed outside of closing, I can't comment on that.

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