Real estate agents, ensure you are paid your compensation at the close of escrow! The following is a critical update regarding the handling of broker commission documents in escrow.
Please note the following requirements to ensure compliance and smooth processing:
The RLA, BRBC, and any SPBB agreements must be deposited into escrow. Escrow can no longer resolve issues related to these agreements solely through “commission instructions.” This change aligns with the updated provisions in the RPA, specifically paragraphs 18A and 19, which state that brokers must deposit their separate agreements into escrow if they are to be included as a party to the transaction.
Additionally, the terms of the RLA and BRBC outline the following:
1. Compensation is irrevocably assigned to the broker, granting them a legal interest/right.
2. The agreements are to serve as the escrow instruction for the transaction.
It’s important to highlight that the SPBB stipulates that if no “buyer representation agreement” is present, the seller owes no commission.
In light of this, broker commission documents must be deposited in order for brokers to be paid through the escrow. This step ensures that we are all in compliance with the RPA and helps prevent any misunderstandings or potential disputes.
Please reach out to your escrow team with any questions or clarifications.
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