While a broker normally accepts that the conclusion is a condition for the payment of his commission, the broker may wish for additional protection by providing in the listing agreement that the broker is entitled to a commission if the seller, instead of selling his property, embarks on an “alternative transaction” leading to the conclusion. The language of alternative transactions can be very broad, but it is at least intended to protect a broker when the seller presents himself as follows: a sale of the ownership shares in the company owning the property; land or other lease of the property; an option to sell the property; or a joint venture for the development of the property. Other trading rules can be complicated and difficult to negotiate, especially because they have to cover many contingencies, without going into the details of one of them. For example, while a seller cannot object to the payment of a commission if the seller enters into a long-term lease for the property and not for a sale, the seller wants to know how the broker`s commission is calculated on a lease agreement and when it is payable (for example.B. during the execution or occupation of the lease agreement or several payments). While the listung agreement may involve other transactions, the seller and broker may need to spend some time thinking about and expanding the most likely alternatives and applicable commission agreements. Mitchel Chargo and Marvin Liszt are shareholders of Bernick Lifson, PA, a full-service business firm in Minneapolis. Mitch and Marvin have over 65 years of experience in commercial real estate. You represent clients in all areas of commercial real estate transactions with significant expertise in the areas of financing, acquisition, development, leasing, sales transactions and property tax claims.

Its clients include lenders, borrowers, owners, buyers, developers, home managers, owners and tenants of commercial real estate. Brokers want to make sure they receive their commission when an interested party they have identified buys or rents after the end of the listing contract. This is an understandable wish, but the owner must always ensure that the provision is appropriate. In addition, the seller will want cross-compensation from the broker. The seller wants the broker`s cross-compensation to cover the broker`s failure to meet its obligations under the listing agreement as well as all claims arising from the broker`s actions that go beyond the broker`s jurisdiction defined in the listing agreement. And there is another problem that the seller must take into consideration. The broker may negotiate or collaborate with another broker representing a potential buyer. Unless a co-broker agreement is explicitly mentioned in the listing agreement, the seller will likely feel that the potential buyer`s broker will be compensated for the commission the seller pays to the seller`s broker.

The seller will not want to be in a position where he is being sued by a broker who represents the buyer, especially if that broker is upset by a disagreement over the commission split between that broker and the seller`s real estate agent….