Home sellers are not aware there are two ways of canceling a real estate listing agreement with their current listing agent.
I want to be clear that a Florida real estate brokerage using the Florida real estate listing agreements has no obligation to
Many agents will tell sellers they can cancel anytime during the listing presentation. First make sure it’s in writing separate from the listing agreement and second confirm if the cancelation will be conditional or unconditional.
Conditional vs. unconditional termination: What’s the difference?
June 5, 2017 – Part 1 of this 3-part series explained that the Florida Realtors residential listing agreement requires the seller to get the broker’s consent to terminate; otherwise, the seller could be exposed to a claim for damages for possible breach of contract.
Today’s post (part 2) summarizes conditional and unconditional termination. Part 3 will cover the legal and ethical risks when a seller wants to discuss terminating another company’s listing agreement.
Based on numerous conversations with members who call into the Legal Hotline, brokers honor a seller’s request to terminate a listing agreement more often than not. When this happens and a broker uses the form Modification to Listing Agreement (MLA-5x), the broker is faced with two similar-sounding termination clauses that have very different meanings.
This termination fits a seller who no longer wants to sell the property. If this turns out not to be the case, full commission would be due if the seller transfers (signs a deed), contracts to transfer (signs a purchase and sale agreement), or contracts to lease the property or any interest in the property “from the date of the conditional termination through the actual Termination Date and Protection Period, if any.”
This termination fits a seller who wants the option to continue marketing the property, with or without the help of another broker, after the termination. Under unconditional termination, both sides agree to powerful release language, as they release each other from “all obligations under the Agreement and … any and all actions arising from or related to the Agreement.”
Joel Maxson is Director of Member Legal Services