Real Estate: California/agent question
Wanted to find out if one would owe a real estate agent commission in this situation generally in the USA.
Here is the situation:
Real estate hired to rent out home in year 1 and received his commission. The second year for the renewal of the same tenant, the landlord used an online contract and leased the home for the 2nd year to the same tenant without using the agent.
In general, does the landlord have any financial obligation or commission to the tenant in the 2nd year, since the landlord used his own contract.
There are four potential answers to your question:
1. Contractually; you will need to look at the original agreement you have with the agent that provided the lease agreement. If it is in writing, you are contractually obligated to pay the commission. However, the agent has no way to make you pay a commission without legal action. See answer three.
2. Ethically; if the agent procured the tenant, it is his client, and unless you obtain another tenant you should ethically pay the commission.
3. Legally; I am not an attorney, so I cannot provide a legal opinion. I would suggest that you consult an attorney to find out if the agent has legal grounds. If it is written in the original agreement, and you do not agree that you owe the commission, the agent has the right to pursue a legal solution. See Answer One and Two.
I suspect that these answers may not be want you want to read, as most people do not like paying commission to agents, but in my biased opinion, you should pay the commission. The Real Estate business is a very difficult profession and very few people appreciate how hard agents work. Without agents, rents and real estate market value would not be as high as it is today because agents are the people that have the networks to put people together.
The real estate agent / client relationship is similar to the relationship you have with your attorney, accountant and your dentist. All are professionals that you rely on. You may not think you need the help of your agent today, but in the future, his expertise may prove to be invaluable.
If you decide that you want to pay your agent the commission for the renewal of the lease, I would suggest before you pay the agent, to have the agent provide the Realtor lease agreement for you and your tenant to sign. Do not just send the agent a check. This will protect you, as most agent have Errors and Omissions insurance and the Realtor lease agreement if written to protect both the landlord and the tenant.
I hope this helps to answers your question or at least gives you something to think about. If so, I would appreciate it if you would give me a positive 10 rating.