Referral Agreement
BROKER / SALESPERSON INDEPENDENT REFERRAL CONTRACTOR AGREEMENT (IRCA)
This Agreement is entered into this (date)_________________________________________ between Patriot Trust Realty Associates, LLC hereinafter referred to as “Broker,” and ________________________________________, hereinafter referred to as “Salesperson.”
Whereas, Broker is engaged in business as a Real Estate Broker and is duly licensed to engage in the activities of a “Broker” as defined by the Pennsylvania Licensing and Registration Act, Act of February 19, 1980, P.L. 15, No. 9, as amended, the West Virginia Real Estate License Act and Legislative Rules, Code of West Virginia Chapter 30, Article 40, as amended, and Title 17, Law and Regulations, Maryland Department of Labor / Maryland General Assembly.
Whereas, Broker maintains one or more offices properly equipped with furnishings, listing books and other equipment necessary and incidental to the proper operation of said business, and staffed with clerical employees, and is thereby suitable to serving the public as a real estate broker; and
Whereas, Salesperson is duly licensed by the Commonwealth of Pennsylvania or the state of West Virginia or the state of Maryland as a real estate “salesperson” or “associate broker” as defined by the Pennsylvania Licensing and Registration Act, the West Virginia Real Estate License Act and Legislative Rules, or Title 17 of the Code of Maryland, and whereas it is deemed to be to the mutual advantage of Broker and Salesperson to enter this contract upon the terms and conditions hereinafter set forth.
NOW THEREFORE, for and in consideration of the mutual covenants and promises herein contained, the undersigned hereby enter into the following articles of agreement:
1. Independent Referral Contractor. The relationship of Salesperson to Broker is that of an independent referral contractor. In keeping with the independent referral contractor status, Salesperson will not and is forbidden to create or execute any form of listing agreements of any type of real estate on broker’s behalf, will not and is forbidden to create or execute any Buyer Agency Contracts on broker’s behalf and will not and is forbidden to act in the capacity of an active real estate licensee. Salesperson may only refer real estate client prospects to the broker and will be paid a referral commission on closed transactions that the Salesperson referred to the Broker and that is processed by the Broker or the Broker’s other designated agent(s) based on the Salesperson’s referral commission rate that is outlined below in paragraph 3. Salesperson shall be responsible for completing any training required by the Act or other laws of the Commonwealth of Pennsylvania and or the state of West Virginia and or the state of Maryland; Salesperson shall work on a referral commission basis and receive no salary, fringe benefits, medical benefits, pension benefits, or profit sharing; no state, local, unemployment, Social Security or business privilege taxes (where applicable) shall be withheld from Salesperson. Salesperson shall pay all professional licensing fees, errors and omissions insurance premiums (except as otherwise provided herein), multi-listing fees and/or computer access fees. Salesperson shall not be treated as an employee with respect to the services performed hereunder for federal or state tax purposes or for purposes under the Workers’ Compensation Act. All costs and obligations incurred by Salesperson in conducting his/her independent business shall be paid solely by Salesperson, who shall indemnify and hold Broker harmless from all costs and obligations. Salesperson will act independently as to the management of his/her time and efforts and shall be responsible for timely payment of all his/her own expenses including, but not limited to, industry association dues, association dues, licensing renewals, cell/mobile phones, etc., as they are incurred.
2. Sales Referral Effort. Salesperson agrees to act as an independent real estate referral salesperson and shall faithfully, loyally, and legally engage his/her efforts to refer any and all real estate client prospects to the Broker, to solicit additional referral customers and clients for Broker, and to otherwise promote the business of serving the public in real estate transactions to the end that each of the parties hereto may derive the greatest profit possible.
3. Commissions and Fees. Salesperson will pay the broker a $195.00 annual referral program fee. Provided that Salesperson is not in default of any of his/her obligations under this agreement, Salesperson shall be entitled to a share of the commissions earned and received by Broker in accordance with Broker’s Salesperson Commission Schedule or plan in effect on the date of the act entitling Salesperson to a commission (e.g., referral of customer or client to Broker.) or as otherwise agreed by the parties in writing as to a particular transaction. Broker may alter its Salesperson Commission Schedule from time to time without prior notification. Revisions to the schedule shall be immediately applicable to all future transactions. The division of commissions between Broker and Salesperson shall follow deduction of all expenses according to the Salesperson Commission Schedule. In no case shall Broker be liable to Salesperson for any commissions not collected, nor shall Salesperson be entitled to any advance or payment from Broker based on future commissions. All commissions derived from a transaction shall be deposited with the Broker as required by the Act and/or Rules and Regulations of the appropriate state’s Real Estate Commission and subsequently paid according to the Salesperson Commission Schedule. This distribution shall take place as soon as practicable after collection and receipt of such commissions. It is understood and agreed that the Salesperson’s only remuneration for the services being rendered under this Agreement is the Salesperson’s share of the commissions paid by the parties to real estate transactions. Payment of any commission(s) to Salesperson is conditioned upon Broker receiving a complete and accurate sales referral file from Salesperson, as well as the earned commission(s) and or Broker’s fee(s) first being deposited and cleared through Broker’s operating and or commissions and payroll business bank account(s).
4. Salesperson Referral Commission Schedule. The Broker/Salesperson Referral Commission Split Percentage Plans is a fixed plan.
Broker/Salesperson Commission Split Percentage Cap Plan (Default): 30/70.
Commission to Salesperson: 30%.
Commission to Broker: 70%.
5. Administration Fees. Any client referral fee received WILL NOT incur a transaction fee however WILL be subject to a $50.00 administration fee from Salesperson’s portion of the commission split. This administration fee will also apply to upfront commission collected on listing agreements and on every installment commission payment on leases and sales.
6. Late Fees. Salesperson shall pay Broker a late payment fee of $50.00 on any payment of the annual program fees and or commissions that are received after the 5th day of the month for which they are due.
* * * NOTE – Unless waived by Broker, Salesperson will provide to Broker a valid bank account and or valid credit or bank card and preauthorization to debit the account for scheduled monthly/semiannual/or annual fees/dues (when applicable) and any other incurred expenses as payments become due. This also applies to credit cards kept on file, however additional fees WILL apply when using a credit card. * * *
7. Expenses. Salesperson agrees and promises to pay Broker monthly for his/her portion of personal, individual expenses, which shall include those items, generated individually by the Salesperson but billed through the Broker in order to take advantage of volume purchasing. These items include, but are not limited to, monthly commission split percentage split program fee, national land network monthly program fee, long distance telephone expenses, promotional brochures, stationery and postcards, business cards, and such items and services made available by Broker at such rate terms, as Broker shall establish. It is the Broker’s intent to minimize paying individual expenses and has the Salesperson pay them directly to the vendor. Salesperson shall be responsible for all his/her personal expenses including, but not limited to, automobile travel, entertainment, food, lodging, license fees and dues, income tax, and the like, which may result from his/her being licensed and associated with Broker. Salesperson is not required to be a member of any local, state or national Realtor association or pay the required dues for such. Salesperson is required to complete the required continuing education requirements as directed by their state of licensure.
8. Nonpayment/Offset. In the event Salesperson does not pay any of his/her financial obligations imposed by the terms of this Agreement, all outstanding balances due shall accrue interest at the rate of eighteen percent (18%) per annum. Salesperson’s payments shall be applied first to late charges and then to interest. Salesperson agrees that Broker may set off against, hold and/or apply any commissions owing to Salesperson any obligations of Salesperson under this Agreement.
9. Cooperative Brokerage. Commission rates are determined only by Broker in the free and unfettered exercise of its independent business judgment. Salesperson shall not participate in any discussion with any person affiliated with or employed by any other real estate firm concerning the commission rates charged by Broker or by any other real estate firm. Potential clients should be invited and encouraged to compare the value of Services provided by Broker to those of any other real estate firm in Salesperson’s marketing area. Likewise, any Salesperson that is invited by a potential client to compare the services of Broker with those of any other real estate firm should do so by emphasizing the nature and quality of the services Broker provides. Whenever Salesperson is not entirely certain about the proper way to respond to the concerns of an actual or potential client or customer, or whenever Salesperson has been present during any unauthorized discussion of fees for commission, Salesperson should immediately contact and advise his/her principal Broker or sales manager of such matter. If necessary, the Broker or Manager will consult Broker’s attorney.
10. Discrimination Prohibited. Salesperson promises to abide by the Pennsylvania Human Relations Act (October 27, 1995, P.L. 744) as well as any other local, state and or federal laws of the Commonwealth of Pennsylvania, the state of West Virginia, and or the state of Maryland, prohibiting discrimination against any person because of race, color, religion, national origin, ancestry, handicap, disability, sex or use of a guide dog because of the blindness of a person who comes to Broker for information regarding housing accommodations and/or obtaining housing accommodations. Salesperson understands that any action, personal behavior, information given or difference in treatment, which results in violation of the Pennsylvania Human Relations Act, state and or federal laws of the Commonwealth of Pennsylvania, the state of West Virginia, and or the state of Maryland, or comparable legal ordinances of local, state, and or federal statutes, or the Pennsylvania Real Estate Commission, the West Virginia Real Estate Commission, or the Maryland Real Estate Commission may be sufficient grounds for the termination of Salespersons association with Broker.
11. Terms. This Agreement shall be for a period of one (1) year from the effective date written above and shall expire on _______________________. This Agreement is automatically renewable on a year-to-year basis until notice by either party is given in writing.
12. Ethic and Trade Associations. Salesperson and Broker shall conduct business and regulate working schedules so as to maintain and to increase the good will, business, profits, and reputation of Broker and Salesperson and each agrees to conform to and abide by all laws, rules and regulations, and code of ethics that are binding on, or applicable to, real estate brokers and salespersons. Salesperson and Broker shall be governed by the Code of Ethics of the National Association of Realtors®, the Act, Rules and Regulations of the Real Estate Commission, as the same may be from time to time amended or supplemented, the constitution and by-laws of the local realty board (or such other board or association as may be agreed upon), and the rules and regulations of any multiple listing service with which Broker may now or in the future be affiliated. Broker shall retain membership in good standing with the National Association of Realtors®, the Pennsylvania Association of Realtors®, the West Virginia Association of Realtors®, the Maryland Association of Realtors®, and the local realty board or association designated by Broker or as may be agreed upon by the parties. Salesperson is not required to be a member of any local, state or national Realtor association or pay the required dues for such. Salesperson is required to complete the required continuing education requirements as directed by their state of licensure. Salesperson acknowledges possession of a current copy of the Pennsylvania Real Estate Licensing and Registration Act, the Rules and Regulations of the Pennsylvania Real Estate Commission, Pennsylvania Licensing and Registration Act and or the West Virginia Real Estate License Act and Legislative Rules if applicable and or the Code of West Virginia Chapter 30, Article 40, as amended if applicable and Title 17, Law and Regulations, Maryland Department of Labor / Maryland General Assembly if applicable,. And the Code of Ethics of the National Association of Realtors® and agrees to be apprised of the provisions thereof so that Salesperson will conduct all activities in a manner consistent with such laws and ethics.
13. Rules and Regulations. Salesperson agrees to adhere to and abide by all decisions and rules of Broker and its contractors, and rules, regulations, policies and procedures directives of Broker.
14. Real Estate License and Dues. Salesperson shall pay the cost of any real estate license required by the provisions of any law or regulation of the Commonwealth of Pennsylvania, the state of West Virginia, and or the state of Maryland. Salesperson shall further ensure that the requirements for licensure as a real estate salesperson by the Commonwealth of Pennsylvania, the state of West Virginia, and or the state of Maryland are satisfied in every respect, including the timely satisfaction of mandatory continuing educational requirements. Salesperson shall pay all dues for membership in the associations set forth in the preceding paragraph of this Agreement in a timely fashion and shall pay all taxes as may be levied upon income or productivity by the federal government, the Internal Revenue Service, the Commonwealth of Pennsylvania, the state of West Virginia, the state of Maryland and or any local municipality or school district or other such taxing authority including but not limited to income taxes, occupation and occupation privilege taxes, per capita taxes, mercantile or business privilege taxes.
15. Authority to Contract. Salesperson shall have NO authority to bind, obligate or commit Broker by any promise or representation. In keeping with the independent referral contractor status, Salesperson will not and is forbidden to create or execute any form of listing agreements of any type of real estate on broker’s behalf, will not and is forbidden to create or execute any Buyer Agency Contracts on broker’s behalf and will not and is forbidden to act in the capacity of an active real estate licensee. Salesperson may only refer real estate client prospects to the broker and will be paid a referral commission on closed transactions that the Salesperson referred to the Broker and that is processed by the Broker or the Broker’s other designated agent(s) based on the Salesperson’s referral commission rate that is outlined below in paragraph 3.
16. Errors and Omissions Insurance. The errors and omissions (Professional Insurance) insurance carrier shall be chosen at Brokers discretion. Salesperson understands that he/she is responsible for payment of the deductible amount (currently $1,000), subject to change at any time, for each errors and omissions claim against Salesperson. Salesperson shall immediately notify Broker of any circumstances likely to give rise to any kind of claim or complaint against Salesperson and/or Broker. In the event of a claim, lawsuit, license complaint or Arbitration demand, which is not wholly covered by the insurance, broker may withhold from the Salesperson's commission payable, an amount adequate to satisfy any amounts not covered, which Broker shall hold and retain, pending settlement or other dispositions of the matter. Broker may, in Broker’s sole discretion, apply such sums as necessary to settle or to satisfy any such claim or award, and Salesperson agrees to cooperate fully in this regard. Salesperson understands that, from time to time, the Broker may deem it necessary to obtain legal consultation concerning one of Salesperson’s transactions; Salesperson agrees to reimburse and indemnify Broker for any Attorney’s fee reasonably incurred by Broker or obtain legal advice concerning such transaction(s). Salesperson shall follow all procedures and use all disclosure statement’s business contracts and other forms prescribed by Broker as part of any program to effect loss control or claims avoidance or reduce insurance premiums.
17. Listings, Contracts, Correspondence, Records and Forms. Salesperson agrees that all listings of property, agency agreements, and all actions taken in connection with the real estate business, shall be property of the Broker. All listings and agency contracts shall be and remain the exclusive property of Broker. All correspondence received, copies of correspondence written, plats, listing information, memoranda, files, photographs, reports, legal opinions, accounting information, and any and all other instruments, documents or information of any nature whatsoever concerning transactions handled by Broker or Salesperson, or jointly, are and shall remain the property of Broker provided that Salesperson is entitled to a copy of such instruments and information upon reasonable request concerning any transaction in which he/she is personally involved. The parties hereto shall mutually approve and agree upon all correspondence from the office of Broker pertaining to transactions handled by Salesperson and shall further agree on the forms to be used and the contents of all contracts and other forms before they are presented to clients and customers for signature.
18. Indemnification. Salesperson shall indemnify and hold Broker harmless from all claims, costs, liabilities, and judgments, including attorney’s fees, arising from the intentional or reckless acts of Salesperson, or acts outside the scope of Salesperson’s authority. When litigation or a dispute arises concerning a transaction in which Salesperson was involved, the parties hereto shall mutually cooperate with each other. In disputes or litigation where there is a claim to the effect that Salesperson has acted intentionally or recklessly or outside the scope of Salesperson’s authority, Salesperson shall bear the costs, expenses and liabilities including judgments and awards arising from the dispute or litigation. In disputes or litigation where there is a claim to the effect that Salesperson has acted negligently, Salesperson shall share the costs, expenses and liabilities including judgments and awards arising from the dispute or litigation. Such sharing shall be in the same proportion as the di- vision of commission was, or would have been, from the subject transaction. The sharing of costs, expenses, and liabilities shall be without prejudice to Broker’s rights of indemnification unless there has been a resolution of the indemnification issue between the parties hereto. Broker shall select counsel to represent Broker’s and Salesperson’s interests in litigation with costs borne by the parties in proportion as set forth above pertaining to the sharing of costs.
19. Termination. This Agreement, and the relationship created hereby, may be terminated by either party hereto, with or without cause, at any time upon written notice. Upon termination, all negotiations commenced by Salesperson during the term of this Agreement shall be handled through Broker and with such assistance and cooperation by Salesperson as is reasonable under the circumstances for the protection of the interests of the parties to the real estate transactions involved. Salesperson, upon termination, shall furnish Broker with a bona fide list of all prospects, leads, and probable transactions developed by Salesperson as well as all correspondence and documents described in Paragraph 11 above, which are deemed to be the property of Broker. Salesperson further agrees that upon termination, or in anticipation thereof, he/she will not furnish to any person, firm, company or corporation engaged in the real estate business any information as to Broker’s clients, customers, properties, prices, terms of negotiations nor Broker’s policies or relationships with clients and customers nor any other information concerning Broker and/or his/her business. Salesperson shall not, after termination of this Agreement, or in contemplation thereof, remove from the files or from the office of Broker any materials, data, publications, correspondence, files or information that is property of Broker. Salesperson shall be entitled to copies of certain instruments pertaining to transactions in which Salesperson has a bona fide interest or pertaining to earnings of Salesperson.
20. Commissions upon Termination. Upon termination, Salesperson’s share of commissions on any transactions where a sales contract exists but the transaction has not closed, shall, after the closing of such transaction, be paid to Salesperson at a 25% commission rate.
21. Listings and Termination. All listings are the property of Broker, no listing will be released to any Salesperson without the Broker’s written approval. Also, if a seller requests not to move the listing it will remain with the Broker. Any fees charged to Broker in connection with releasing or transferring a listing to another Broker on behalf of the Salesperson, will be charged to the Salesperson’s credit card on file or deducted from commissions, or billed directly. In order for a listing to be released, the receiving Broker must agree in writing to pay a 35% referral fee on the listing prior to the listing being released.
22. Termination Procedure. Upon termination by either party, Salesperson shall immediately:
a) submit a letter of termination with a complete accounting of commissions, listings, and buyer clients,
b) return all supplies, client/customer prospect lists, key cards, keys and documents considered property of Broker pursuant to the provisions of this Agreement,
c) meet with Broker for the purpose of attempting to mutually agree upon a final accounting of commissions due and payable,
d) cooperate in the notification of the appropriate state’s Real Estate Commission regarding the termination of the relationship of Broker and Salesperson.
23. Arbitration of Disputes. Disagreements or disputes between Salesperson and Broker, or between Salesperson and a real estate licensee associated with or contracted to Broker, and which arise out of, or in connection with, the real estate business, and which cannot be adjusted by and between the parties involved, shall be submitted for arbitration in accordance with Article XIV of the Code of Ethics of the National Association of Realtors®. By this Agreement said arbitration shall be mandatory and Broker and Salesperson agree to provide a written agreement to the local association of Realtors® as may be required by said association as a condition precedent to arbitration. Broker and Salesperson agree to be bound by the decision of the arbitration panel of the local association or the Pennsylvania Association of Realtors® or the West Virginia Association of Realtors® or the Maryland Association of Realtors® which has entertained the dispute or disagreement. The conduct of the arbitration shall be governed by the Code of Ethics and Arbitration Manual most recently published by the National Association of Realtors® prior to Arbitration, as amended by the local association hearing the dispute.
24. Restrictions on Subsequent Business Activity. Salesperson shall not, after termination of this Agreement, use of permit, suffer or tolerate the use of his/her own advantage or the advantage of any other person or entity any information gained from the files or business of Broker nor shall Salesperson solicit or attempt to sell to those clients already clients of the Broker and Salesperson further agrees that the sales plans, programs, materials, manuals, brochures, and other training, listing, and sales materials provided by Broker are agreed to be the exclusive property of Broker and shall not be utilized in connection with the real estate business hereafter carried on by Salesperson, either alone or in conjunction with other individuals or entities, or otherwise divulged by Salesperson to any third parties. Salesperson further acknowledges Broker’s exclusive right to its real estate system, its methods of operation, and its distinguishing characteristics as they now exist or hereafter become part of Broker’s method of doing business, including but not limited to, service marks, trademarks, trade names, copyrights, logos, names, or other advertising copy now or hereafter displayed, used or becoming part of the Broker’s business; and Salesperson agrees neither to infringe upon, use nor initiate said system or any of the above distinguishing characteristics after termination of this Agreement except upon the prior written authorization from Broker.
25. Amendments. This Agreement may be amended only by the parties hereto, in writing.
26. Governing Law. This Agreement shall be governed by and interpreted pursuant to the laws of the Commonwealth of Pennsylvania or the state of West Virginia or the state of Maryland. Whichever state is the primary issuer of Salesperson’s real estate license.
27. Successors in Interest. This Agreement shall inure to the benefit and be binding upon the successors in interest of Broker. This Agreement, however, is based on the personal services of Salesperson and Salesperson shall not delegate or assign any of Salesperson’s rights or duties hereunder without the prior written consent of Broker.
28. Policy Manual. Any office policy or rules and procedures manual now existing or hereafter adopted or amended shall be binding on the parties.
29. Entire Agreement. This Agreement constitutes the entire agreement between the Broker and Salesperson, and there are no agreements or understandings not expressed herein.
IN WITNESS WHEREOF, this Agreement has been executed on the date first above written.
By: ______________________________________ Real Estate License # _________________
Broker
By: ______________________________________ Real Estate License # _________________
Salesperson