Regardless of the type of listing contract used in a commercial real estate transaction, your clients must be informed of the rights and obligations arising from the listing agreement. This also applies if you advise the commercial real estate agent or seller, as their right to compensation for their hard work depends on the validity of the listing contract. The rating agreement is not a constituent document; rather, it is a document that requires careful review, verification, negotiation and development. Too often, clients hire a lawyer for the first time in a commercial real estate transaction when they wish to make an offer to purchase a property or after receiving an offer to sell real estate. Nevertheless, there is an important step in this process, which is often overlooked – the revision and negotiation of the list agreement. Whether a lawyer represents the owner of the property, the buyer of the property or the broker/seller who lists the property for sale, clients must be informed of the essential rights and obligations established and exposed in the listing agreement. List agreements are not boiler platform agreements and can be negotiated in many ways. They must have legal requirements to be enforceable. However, clients often sign the list contract without verification or negotiation.
Keep in mind that property owners are not the only party to benefit from a thorough audit and understanding of the list agreement; Commercial real estate agents and sellers will also benefit. Although the article focuses on the representation of the seller or broker, the consultant should be aware that many of the concepts discussed here may also apply to buyer/broker agreements. It is interesting to know that there are non-exclusive agreements when it comes to real estate agents. I intend to find a commercial real estate agent soon to get a glimpse of the state of the market. That way, I can decide whether it`s time to start investing. A word about the termination of the list contract. The general rule is that a list agreement that contains a specified expiration date, as required by Minn. 1 (b) (1) is prescribed by its conditions. It goes without saying that the parties can also agree to each other to terminate the listing contract before the expiry.
A listing agreement that does not set a specified expiry date, but which, on the other hand, largely meets the legal requirements, can be terminated at will. Rosenberg v. Heritage Renovations, LLC, 685 N.W.2d 320, 326 (Minn. 2004). Work again on the list agreement to obtain an acceptable expiration date for both parties. The legal consequences of listing agreements have been the subject of numerous litigations in Minnesota. Therefore, an understanding of the intricacies of list agreements is essential to fully represent a client in a commercial real estate transaction. Therefore, there are several issues that counsel should consider when developing or reviewing a list agreement. For example, counsel should understand: (i) what type of list agreement is appropriate for the subject transaction; (ii) the length or duration of the appropriate rating agreement; (iii) events or conditions that may give the broker the right to be compensated; (iv) the length of the transfer period; and (v) the circumstances that haunt one of the parties to terminate the list contract. In addition, a broker (and brokerage advisor) should be concerned about and knowledge of the language in a sales contract that regulates the payment of commissions to brokers. Such a language must be consistent with the terms of the listing agreement.l Certain legal requirements must be met in order for a listing agreement between the owner of the building and the broker to be valid.
The first and most important step is for the parties to enter into a written list agreement.