In August of 2024 NAR finalized the settlement of a large court case but this was ONLY applicable to property sales, not rentals.
How does the settlement impact agents when handling rental properties?
A: The field for offers of compensation will no longer be allowed in the MLS, so an agent working with a renter would need to contact the property manager/owner/leasing agent to find out what, if any, compensation is being offered.
Are renters required to sign a Buyer/Tenant Representation Agreement before touring a rental property?
A: The settlement only deals with properties for sale on this issue of buyer representation, and it does not address rentals or change anything about needing a written agreement prior to showing a rental property. It would still be a smart idea to have a conversation with the client about how the agent will be compensated and have the Buyer/Tenant Representation Agreement signed.
In March 2024 FAR updated the Exclusive Right to Lease Listing Agreement . This form still “reads” like the historic form with a total offer of compensation specified and a percent to be shared with cooperating Brokers.
The MLS however no longer has ANY offer of compensation field for sales, or rental, properties and MLS rules require that listings NOT contain any offer of compensation in the MLS to other MLS Participants and Subscribers.
But again, the NAR settlement was only specific to Buyers and not to Renters. Still, the Agent working with a prospective Tenant may NO LONGER rely upon any offer of compensation contained in the MLS as it’s no longer in it.
I am of the opinion that “Broker” for the Consumer should execute with the “Consumer” (the prospect Tenant/customer) the Transactional Broker version of the Exclusive Consumer Brokerage Agreement (EBBA-7tb) PRIOR to the Broker for the Consumer showing any property to the Consumer.
To change the EBBA form, OR to cancel it, one should form MEBSSA-1.
Note as well that one could also use the Showing Agreement form (SA-4) which would be specific to showing a Consumer specific properties. This may be useful to say show the Consumer very specific properties while they are in town.
Prior to showing property to a Consumer who has executed the EBBA the Broker for the Consumer should text the Listing Agent and ask IF the Owner/Landlord has agreed to compensate the Broker for the Consumer?
If the answer is NO, as in the Owner is NOT willing to compensate the Broker for the Consumer, then the Broker for the Consumer should speak to the Consumer and let them know that the Owner/Landlord is not willing to compensate them and that they, the Consumer, will be responsible for the payment of the fee specified on the EBBA. Note that the EBBA form is applicable to any real property interest acquisition (Buy or Rent) of the type and location specified on the form and for the duration of the agreement. If they want to contact the LA directly then they would need to ASK if the Broker for the Consumer will agree to cancel the agreement and at that time they would owe the specified cancellation fee.
Assuming that the Owner/Landlord is compensating the Broker for the Consumer and the Consumer wishes to make an offer on the Property then the Broker for the Consumer should text the Listing Agent and state that your customer (the Consumer) is considering making an offer and that before that you will need to send them the Compensation Agreement form CAOT-1.
Because there is no longer any offer of compensation in the MLS the Broker for the Consumer MUST memorialize the compensation agreed to from the Owner/Listing Broker to the Broker for the Tenant (a/k/a Consumer) in a separate written agreement between yourself and the Listing Broker/Owner using form CAOT-1.
Also note that the standard Lease form for a Single Family Home has a clause in it which MAY suffice as well ASSUMING that that the Owner uses this form.
28. BROKERS’ COMMISSION. Check and complete if applicable. The brokerage companies named below will be paid the commission set forth in this paragraph by Landlord Tenant for procuring a tenant for this transaction.
HOWEVER THE STANDARD LEASE FORM FOR A CONDOMINIUM DOES NOT.
