Q: I’m a broker. A new sales associate that I hired has obtained a listing wherein a buyer and seller have entered into a contract for sale and purchase. My sales associate wants the closing agent to pay her portion of the commission directly to her when the transaction closes next month. My understanding is that only an employer (in this case, me) may pay an associate. May I instruct the closing agent to pay the sales associate’s portion of her commission directly to her at closing?
A: Yes. In 1999, the Florida Real Estate Commission (FREC) stated in a Final Order (FREC DS-98-02) that a broker “may by written authorization request that a closing agent disburse commissions directly to its salespersons following the closing of the transaction.” FREC clearly outlines in this Final Order what must be provided in the written authorization: (a) identify the transaction; (b) state the name of the salesperson entitled to the commission; (c) specify the amount the salesperson should be paid; and (d) sign the authorization.