Termination of Listing or Buyer Brokerage Agreement With Agent & Their Buyers/Sellers In SE Virginia
Updated: Mar 10
Today I was asked about what the "termination clause" was in my listing agreement in the event that the seller was unhappy with my service. It was asked during the course of an interview prior to the prospect of listing with me. This article is a response to that and a response to others who may be wondering the same thing.
The listing agreements and buyer brokerage agreements that are most commonly used in our area don't get too explicit with termination clauses, while the law does get explicit & should be relied on for termination when not explicit in the agreement.
The REIN Standard Agent Exclusive Right to Sell Brokerage agreement repeats much of what's in the law.
Below I am providing where to look and what you can terminate for as well as how to avoid getting to the place of termination. The primary recourse for termination, in my experience, isn't by some actual breach of contract, but by exercising the right of "mutual agreement" since an actual breach of contract according to the legal code seems to happen much less often than less serious problems.
Disclosure
Please keep in mind that I am a real estate agent, not an attorney and that for any interpretation of the law, an attorney within the field of real estate can best interpret the law.
The mentioned forms and laws change over time & this article was originally composed and researched on 11/23/22. While this page may be used as a resource, before acting on any information entailed, it's best to check current contracts & legal code, as these can vary substantially over time & this page may not be up to date regarding certain matters after 11/23/22. In the event that you see any changes that you believe should be updated on this page, Adam would sincerely appreciate you informing him of the change at agarrett@ggrva.com .
Termination Details Per VA Law
§ 54.1-2137. Commencement and termination of brokerage relationships.
A. The brokerage relationships set forth in this article shall commence at the time that a client engages a licensee and shall continue until (i) completion of performance in accordance with the brokerage agreement or (ii) the earlier of (a) any date of expiration agreed upon by the parties as part of the brokerage agreement or in any amendments thereto, (b) any mutually agreed upon termination of the brokerage agreement, (c) a default by any party under the terms of the brokerage agreement, or (d) a termination as set forth in subsection G of § 54.1-2139. (Note from Adam: that section is on dual & designated agency; I do not perform dual agency, but will perform designated agency at times, where a buyer from my firm with another agent makes an offer and gets under contract on a listing where I represent the seller)
B. Brokerage agreements shall be in writing and shall:
1. Have a definite termination date; however, if a brokerage agreement does not specify a definite termination date, the brokerage agreement shall terminate 90 days after the date of the brokerage agreement;
2. State the amount of the brokerage fees and how and when such fees are to be paid;
3. State the services to be rendered by the licensee;
4. Include such other terms of the brokerage relationship as have been agreed to by the client and the licensee; and
5. In the case of brokerage agreements entered into in conjunction with the client's consent to a dual representation, the disclosures set out in subsection A of § 54.1-2139.
C. Except as otherwise agreed to in writing, a licensee owes no further duties to a client after termination, expiration, or completion of performance of the brokerage agreement, except to (i) account for all moneys and property relating to the brokerage relationship and (ii) keep confidential all personal and financial information received from the client during the course of the brokerage relationship and any other information that the client requests during the brokerage relationship be maintained confidential, unless otherwise provided by law or the client consents in writing to the release of such information.
1995, cc. 741, 813; 2011, c. 461; 2012, c. 750; 2018, cc. 60, 86.
Recommended steps for termination
1. Check the termination details per VA law as well as the buyer brokerage agreement or listing agreement & see if the agent is in breach of anything. The primary recourse for termination, in my experience, isn't by some actual breach of contract, but by exercising the right of "mutual agreement" since an actual breach of contract according to the legal code seems to happen much less often than less serious problems.
2. Discuss with the agent in writing your problems with them and give them a chance to correct those issues unless you have totally lost confidence in them or do not trust them. In some cases, client preferences vary substantially and the agent may not be aware of your unique preferences. For instance, some clients like to be contacted by their agent even if they are not reaching out to the agent, while other clients would be annoyed by their agent pestering them unless they reach out to the agent. Some clients prefer as much as possible in writing, while other clients prefer everything to be discussed orally. If you are working with an otherwise great agent, if you don't give them a chance to correct themselves, you may find that your next agent isn't as good as the first, and if the agent is never told until termination about the problems, they may have no idea about something that they can readily modify or clarify.
3. If the agent refuses to change their policies & you are still very frustrated, by word or by deed, or if you have totally lost confidence in them or do not trust them, move to looking for other agents (buyers, sellers) and termination. With the agent you have in mind, make sure that you could work with them. Some agents like myself limit who we work with, such as by location and price point. You don't want too wide of a gap between agents, and you don't want to go from a great agent who you have a minor problem with to an agent not as good who doesn't have that minor problem according to what the agent says.
4. In writing, ask the agent to terminate your agreement, stating your reasons why and sharing the date that you expressed your concerns with them in writing and about how they refused to change by word or deed. The agent or their broker may ask to refer you to another agent, so pre-emptively let them know that you do not want a referral to another agent.
5. If the agent refuses to terminate your agreement, reach out to their principal or managing broker, whose name and contact details should be located on your buyer brokerage agreement or listing agreement.
To avoid getting to the point where termination seems best, I advise...
1. Buyers and sellers should be candid and open with their agents about any problems as they occur prior to and during an agency relationship. Bottling problems until you get to the breaking point will hurt you, your sale/purchase, and your agent.
2. Prior to entering into an agency relationship with an agent, it's best to select an agent that has been thoroughly vetted. There is a big difference between "good enough" & "best".
Vetting Potential Listing Agents
For sellers, see this important article on vetting prospective listing agents so that you reduce your likelihood of ever getting to the point of termination by never hiring a bad one.
Vetting Potential Buyer Agents
Your agent's reviews should demonstrate the qualities that you are looking for. See also their physical tools/gadgets & digital tools. An experienced agent is also very important. Here's an article on vetting buyer's agents.
Legal Duties of Real Estate Brokers & Salespersons to Their Buyer Clients
Article 3. Duties of Real Estate Brokers and Salespersons.
The below is quoted from the VA legal code listed here as of 11/23/22 excluding the note by Adam in "()".
§ 54.1-2132. Licensees engaged by buyers.
A. A licensee engaged by a buyer shall:
1. Perform in accordance with the terms of the brokerage agreement;
2. Promote the interests of the buyer by:
a. Seeking a property of a type acceptable to the buyer and at a price and on terms acceptable to the buyer; however, the licensee shall not be obligated to seek other properties for the buyer while the buyer is a party to a contract to purchase property unless agreed to as part of the brokerage relationship;
b. Assisting in the drafting and negotiating of offers and counteroffers, amendments, and addenda to the real estate contract pursuant to § 54.1-2101.1 and in establishing strategies for accomplishing the buyer's objectives;
c. Receiving and presenting in a timely manner all written offers or counteroffers to and from the buyer and seller, even when the buyer is already a party to a contract to purchase property; and
d. Providing reasonable assistance to the buyer to satisfy the buyer's contract obligations and to facilitate settlement of the purchase contract;
3. Maintain confidentiality of all personal and financial information received from the client during the brokerage relationship and any other information that the client requests during the brokerage relationship be maintained confidential unless otherwise provided by law or the buyer consents in writing to the release of such information;
4. Exercise ordinary care;
5. Account in a timely manner for all money and property received by the licensee in which the buyer has or may have an interest;
6. Disclose to the buyer material facts related to the property or concerning the transaction of which the licensee has actual knowledge; and
7. Comply with all requirements of this article, all fair housing statutes and regulations for residential real estate transactions as applicable, and all other applicable statutes and regulations which are not in conflict with this article.
B. Licensees shall treat all prospective sellers honestly and shall not knowingly give them false information. If a licensee has actual knowledge of the existence of defective drywall in a residential property, the licensee shall disclose the same to the buyer. For purposes of this section, "defective drywall" means all defective drywall as defined in § 36-156.1. No cause of action shall arise against any licensee for revealing information as required by this article or applicable law. In the case of a residential transaction, a licensee engaged by a buyer shall disclose to a seller whether or not the buyer intends to occupy the property as a principal residence. The buyer's expressions of such intent in the contract of sale shall satisfy this requirement and no cause of action shall arise against any licensee for the disclosure or any inaccuracy in such disclosure, or the nondisclosure of the buyer in this regard.
C. A licensee engaged by a buyer in a real estate transaction may, unless prohibited by law or the brokerage agreement, provide assistance to the seller, or prospective seller, by performing ministerial acts. Performing such ministerial acts that are not inconsistent with subsection A shall not be construed to violate the licensee's brokerage agreement with the buyer unless expressly prohibited by the terms of the brokerage agreement, nor shall performing such ministerial acts be construed to form a brokerage relationship with such seller.
D. A licensee engaged by a buyer does not breach any duty or obligation to the buyer by showing properties in which the buyer is interested to other prospective buyers, whether as clients or customers, by representing other buyers looking at the same or other properties, or by representing sellers relative to other properties.
E. Licensees in residential real estate transactions shall disclose brokerage relationships pursuant to the provisions of this article.
F. Nothing in this section shall be construed to require a licensee to disclose whether settlement services under Chapter 10 (§ 55.1-1000 et seq.) of Title 55.1 will be provided by an attorney or a nonattorney settlement agent.
G. Notwithstanding any other provision of law requiring written brokerage agreements or governing the duties of licensees, nothing in this chapter (Note by Adam: See VA codes 54.1-2130 &54.1-2137, & this article on the subject) shall be construed to require that a written agreement between a licensee and a prospective buyer be executed prior to the licensee's showing properties to the prospective buyer.
1995, cc. 741, 813; 2006, c. 627; 2011, cc. 34, 46; 2012, c. 750; 2016, c. 334.
Legal Duties of Real Estate Brokers & Salespersons to Their Seller Clients
Article 3. Duties of Real Estate Brokers and Salespersons.
The below is quoted from the VA legal code listed here as of 11/23/22.
§ 54.1-2131. Licensees engaged by sellers.