11. COMPENSATION

11.1     No Control of Commission Rates or Fees Charged by Participants.  BAREIS shall not fix, control, recommend, suggest, or maintain commission rates or fees for services to be rendered by Participants.  Further, BAREIS shall not fix, control, recommend, suggest, or maintain the division of commissions or fees between cooperating Participants or between Participants and non-Participants.  BAREIS shall not be a party to the settlement of any dispute over compensation.

11.2          Unconditional Unilateral Contractual Offer.  By making a compensation offer in the MLS Database, the listing broker is making a blanket unconditional unilateral contractual offer of compensation to the other Participants and, through the Participants, other Members, for their service in selling the property.  A listing broker must specify, in either a dollar amount or as a percentage of the sales price, the compensation to be paid.  Any offer of a referral fee in addition to or in lieu of a commission, and any requirements, limitations, or restrictions to receive or to qualify for the unilateral contractual offer of compensation, for example, estate sale, probate, bankruptcy, and lender approval listings, must be specified clearly in the confidential remarks in the listing.  All offers of compensation are unconditional, except that entitlement to compensation is determined (i) by the cooperating broker’s performance as the procuring cause of a ready, able and willing buyer of the listed property on terms acceptable to the seller, as evidenced by the execution and delivery of a binding contract of sale between the buyer and the seller, (ii) by the cooperating broker’s introducing the buyer to the seller within the terms of a listing that offers a referral fee, as evidenced by the execution and delivery of a binding contract of sale between the buyer and the seller, or (iii) as otherwise provided for in these Rules and Regulations.  The listing broker’s obligation to compensate any cooperating broker as the broker procuring the sale may be excused if it is determined through arbitration or other proceeding that, through no fault of the listing broker and in the exercise of good faith and reasonable care, it was impossible or financially unfeasible for the listing broker to collect a commission pursuant to the listing agreement. (12/1/06)

11.3     Acceptance of Contractual Offer.  The listing broker’s blanket unconditional unilateral contractual offer pursuant to Regulation 11.2 is accepted by the cooperating broker when he or she procures a buyer, lessee or exchangee and a sale contract or lease agreement is entered into.  Payment of compensation by the listing broker to the cooperating broker under this Regulation 11.3 is contingent upon either (a) the final closing or (b) the listing broker’s receipt of monies resulting from the seller’s or buyer’s default under the underlying sale contract or lease agreement.  Notwithstanding this Regulation 11.3, the listing broker or cooperating broker shall still retain any remedies they may have against either the buyer or seller due to a default under the terms of the sale contract, listing agreement, or other specific contract.  Any dispute between the Participants arising out of this Regulation 11.3 shall be arbitrated under applicable Rules and Regulations,  CAR interboard arbitration rules, or Regulation 16.5, and shall not be considered a Rules and Regulations violation.

11.4    Changes to Unilateral Offer of Compensation of All Participants.  The listing broker may, from time to time, adjust the published compensation offered in the MLS Database.  Any change in compensation shall be effective when published in the MLS Database.  The listing broker may revoke or modify the offer of compensation in advance to any individual broker Participant in accordance with general contract principles, but in no event shall the listing broker revoke or modify the offer of compensation without the cooperating broker’s consent after the cooperating broker (a) physically delivers or transmits by fax or email to the listing broker a signed offer from a prospective buyer to purchase the property for which the compensation has been offered through the MLS Database, or (b) notifies the listing broker in person or by telephone, facsimile or email that the cooperating broker is in possession of a signed offer from a prospective buyer to purchase the property for which the compensation has been offered through the MLS Database and is awaiting instructions from the listing broker as to the manner of presentation or delivery of that offer.  Any independent advance revocations, modifications of the offer, or agreements between brokers are solely the responsibility of such brokers, and shall not be filed with, published by, or governed in any way by, BAREIS. 

11.5     No Change of Compensation as a Condition of Offer.  Neither the listing nor the cooperating broker shall use the terms of an offer to purchase to attempt to modify the unilateral offer of compensation or the cooperating broker’s right to receive such compensation, nor make the submission of an executed offer to purchase contingent on an agreement to modify the offer of , or the right to receive, such compensation.  Failure of a listing or cooperating broker to comply with this Regulation 11.5 shall not relieve a listing broker of the obligation to submit all offers to the seller as required by California law.  BAREIS shall not be a party to the settlement of any dispute over compensation.

11.6     Dual or Variable-Rate Commission Arrangements.  The existence of a dual- or variable-rate commission arrangement in the listing agreement shall be disclosed by the listing broker by a key, code or symbol, as required by BAREIS.  A dual- or variable-rate commission arrangement is one in which, for example, (a) the seller agrees to pay a specified commission if the property is sold by the listing broker without assistance and a different commission if the sale results through the efforts of a cooperating broker, or (b) a different commission if the sale results through the efforts of the seller.  If the cooperating broker is representing a buyer, the cooperating broker must then disclose such information to his or her client before the client makes an offer to purchase.  The listing broker shall, in response to inquiries from potential cooperating brokers, disclose the differential that would result in either a cooperative transaction or, alternatively, in a sale that results through the efforts of the seller.