A buyer’s right to inspect is covered in the GAR Purchase and Sale Agreement (PSA) in Section 8, page 3, Inspection and Due Diligence. It is also included in the Temporary Occupancy Agreement (TOA).
The GAR Purchase and Sale Agreement allows buyers or their agents to enter the seller’s property to inspect, both during due diligence and after due diligence, right up until the day of closing. Frequent, extended or unscheduled inspections can create friction between the parties. Communication, cooperation and courtesy can win the day.
Can a Client Terminate a Buyer Brokerage Relationship?
The GAR Brokerage Relationship Agreements do not contain any early termination clauses.
In the absence of an express early termination provision or a material breach by the broker, clients do not have the right to unilaterally terminate brokerage engagement agreements. If the client does unilaterally terminate, that client is in breach of the agreement.
Am I Owed A Commission if a Buyer Unilaterally Terminates and Purchases Within the term of the Agreement and Protected Period?
Yes, so long as the BBEA is an Exclusive BBEA and the broker is not in default. If the buyer’s obligation to pay a commission is in the agreement, the broker is owed a commission, regardless of whether the property is one that the broker identified for the buyer or not. (Exception for a non-exclusive BBA. See below.)
The Exclusive BBEA provides that the buyer’s real estate broker will seek to be paid his commission from the seller or seller’s broker pursuant to a cooperative brokerage arrangement. In the event neither of these parties pays a commission to the buyer’s broker, then the commission may be paid by the buyer if such obligation is indicated in the brokerage agreement, regardless of whether the property is one that the broker identified for the buyer or not. This provision contractually modifies the general common law rule that the broker is only entitled to a commission if the broker is the procuring cause of the sale (i.e., the broker’s efforts resulted in an uninterrupted series of events that resulted in the sale). Under Georgia law, the parties to a contract are free to agree on whatever terms and about any subject matter in which they have an interest in the absence of a violation of public policy or law. The GAR BBEA contractually makes this distinction.
Consider this recent example.
A buyer has executed an Exclusive BBEA with a broker. The buyer goes alone to an open house within the term of the agreement and tells the listing agent that she does not have a brokerage agreement with any buyer broker. The buyer purchases directly from the listing agent.
One of the review points of every brokerage agreement is whether contact information for the client and the licensee is included in the signature block of the brokerage and purchase agreements. Legal notices to parties are driven by that content. If an email, a fax or a physical address is not included, that form of notice cannot be used. Without good contact information, you may find yourself personally delivering documents to a party – either close by or far, far away. Read on.
Very often, a listing broker, particularly a lease listing broker, will also work with a tenant or a buyer as a customer. The duties owed to that customer by the listing broker are defined in BRETTA § 10-6A-5 - Duties and responsibilities of broker engaged by seller.
The listing broker must timely disclose the following to all parties, including the customer. Remember, failure to disclose can result in a claim of fraud.
Real Estate News, Brokers Blog & More