Bulletin: FL000082

Dear Associates:

In the past, it has always been that the payment for real estate commissions made as a part of a closing were paid to the brokers only and never directly to the sales person, although sales persons have made that request from time to time in order to expedite receipt of their commission.

The Florida Real Estate Commission has recently issued an Order changing this practice. In doing so the Commission has interpreted FS 475.42(1)(d) to allow a broker to give a written authorization to the closing agent, so that the closing agent can disburse commissions directly to sales persons. The Final Order issued by the Department of Business and Professional Regulation, Florida Real Estate Commission, deals specifically with a Petition made by Coldwell Banker and in the language of the decision reference is only made to Coldwell Banker and does not anywhere indicate that this Ruling applies to other than Coldwell Banker and a specific corporate structure. However, it would seem that any other real estate broker and agents, who follow the exact same procedure, as described in the final order, should be entitled to the same result.

Therefore, in order to disburse a real estate agent's commission at closing, you should follow the following procedure. You should obtain from the real estate broker a letter, which contains a following information:

1. Identifies the specific transaction

2. States the name of the sales person entitled to the commission

3. Specifies the amount the sales person should be paid

4. That letter must be signed by the real estate broker or by the broker's office manager who supervises that particular sales person.