Terminate brokerage or listing agreements with buyer prematurely

There are important differences between a conditional and unconditional termination when a buyer or seller and a brokerage firm agree to part ways.

ORLANDO, Fla. — Florida Realtors® forms include an Exclusive Buyer’s Brokerage Agreement (EBBA) and an Exclusive Right to Sell (ERS) Listing Agreement. The EBBA has recently undergone significant changes, and one of those changes is that it now includes a conditional termination clause that is very similar to the one we have had for years in the ERS.

The key elements of the EBBA and ERS conditional termination clause are:

Either the buyer or seller may request termination.
It is up to the broker to agree or not to terminate the contract.
The clause only mentions conditional termination.
The buyer or seller will be liable for termination fees.
The buyer or seller may still owe compensation after the contract is terminated.

Although the EBBA and ERS agreements only mention conditional termination, the accompanying forms that the parties can use to terminate the agreement also include an option for unconditional termination. The accompanying forms are called Amendment to Exclusive Buyer Brokerage Agreement/Showing Agreement (MEBBSA) and Amendment to Listing Agreement (MLA).

Based on numerous conversations with Florida Realtors legal hotline members, brokers routinely honor a termination request. When they do, they will have to decide what type of dismissal makes the most sense in the circumstances:

Conditional termination. This termination is suitable for parties who are no longer interested in purchasing or selling and who plan to cease operations until the EBBA or ERS deadlines have expired. The parties will need to negotiate a later date on which the buyer or seller will be free to resume operations. The clause is identical in the MEBBSA and the MLA and provides: “The parties agree to conditionally terminate the agreement. The consumer will pay the agreed cancellation fees and the conditional termination date will be .

Although the broker is not required to offer services after a conditional termination, full compensation would be due if a buyer or seller enters into a purchase and sale agreement. In the case of a seller, he will also owe compensation if he transfers the property (i.e. signs a deed) without signing a contract.

Unconditional termination. This termination is suitable for parties who want to make a clean break and move on. Immediately following an unconditional termination, a buyer or seller may enter into a new EBBA or ERS with another brokerage firm. In the event of unconditional termination, both parties agree to strong release language, as they release each other from “all obligations under the Agreement and…all claims and actions arising out of or relating to the Agreement” .

Joel Maxson is deputy general counsel

Note: Information believed to be accurate at date of publication