How to Handle Commission Disputes

🔹 1. Understand Common Causes of Commission Disputes

Most conflicts arise from:

  • Ambiguity in contracts (commission not clearly stated in the listing agreement, or BRBC.
  • Procuring cause disputes (who actually “brought” the buyer).
  • Unauthorized changes (modifications to commission without agreement from all parties).
  • Dual representation misunderstandings (when more than one broker claims entitlement).

🔹 2. Start With Documentation

  • Review the listing agreement, purchase contract, and MLS instructions to confirm the agreed-upon commission.
  • Check if any addendums or amendments exist that alter commission.
  • Gather emails, texts, and communication records that show the timeline of who did what.

👉 Reminder: Most commission disputes are resolved by what’s written, not verbal promises.

🔹 3. Attempt Informal Resolution

  • Speak directly with the other agent/broker first.
  • Keep the conversation professional and fact-based (avoid emotions).
  • Suggest compromise when reasonable — sometimes splitting or adjusting is better than lengthy disputes.

🔹 4. Brokerage Involvement

  • Escalate to the broker of record (if you’re the agent).
  • Brokers are ultimately responsible for commission disputes and are usually better positioned to negotiate resolution.

🔹 5. MLS / Association Procedures

If informal resolution fails:

  • File a commission dispute with the local Realtor® association (if both agents are members).
  • Most associations have a Professional Standards Committee that handles arbitration for procuring cause disputes.
  • Arbitration decisions are binding under NAR rules.

🔹 6. Mediation & Arbitration

  • Many listing agreements and BRBC contracts require disputes to go through mediation/arbitration before court.
  • Mediation is less formal, focuses on compromise.
  • Arbitration is binding, decided by a neutral third party.

🔹 7. Legal Action (Last Resort)

  • If no resolution is reached, brokers may pursue civil court action.
  • This is costly, time-consuming, and usually avoidable.

âś… Key Tips for Agents

  1. Always put commission agreements in writing.
  2. Confirm the commission rate in the RPA, and listing agreements.
  3. Document your role in procuring cause (emails, showings, communications).
  4. In disputes, stay professional — let the brokers and association procedures do the heavy lifting.

Disclaimer:
The questions and answers provided are for general guidance only and may not cover all details or apply to every situation. If anything is unclear or you need further clarification, please visit car.org for official resources and the most up-to-date information from the California Association of REALTORS®.