Commission Issues: Broker to Broker

Duty to Cooperate

  • The Ohio Revised Code does not require brokers to “cooperate,” to share or split commissions with other licensed brokers. However, the license law does require that the broker’s policy on cooperation and compensation must be disclosed in the brokerage’s Consumer Guide to Agency Relationships which is provided to both sellers and buyers. (Ohio Revised Code Section 4735.56(B)(5))
  • Article 22 of NAR’s Code of Ethics requires REALTORS to “cooperate” except when it is not in the client’s best interests.
  • A broker’s duties under agency laws may obligate him to offer cooperation (including a share of commission) to other brokers because it increases the pool of potential buyers.

Disputes Over Commissions

  • Disputes between brokers regarding cooperative arrangements or procuring cause will not be investigated, arbitrated, or handled in any way by the Division of Real Estate.
  • REALTORS are required to arbitrate such disputes they have with one another concerning entitlement to commissions at their local Board. (Article 17 of NAR Code of Ethics)

Establishing a Basis for a Commission

  • An agreement to pay must first be shown to exist between the brokers in order to establish entitlement to a commission. If an agreement can be shown, the next issue to be determined is that of procuring cause.Procuring Cause
  • Procuring cause is a legal concept utilized by Ohio courts and local Board of REALTORS® to determine a broker’s entitlement to a commission. It is defined in Ohio case law as a cause directly originating a series of events which without break in their continuity directly results in the accomplishment of producing a ready, willing and able buyer. (See OAR’s Procuring Cause White Paper for a detailed discussion of this topic.)