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Agreements
Q My broker wants me to sign a non-compete agreement stating that I won’t work in a certain area for a predetermined period of time if I ever leave his firm. Is that permissible?

A Yes. Non-compete agreements are legal, but they’re very narrowly construed by the courts and are considered on a case-by-case basis. Factors that influence the enforceability of a non-compete agreement include: geographical area, length of time, availability of comparable work outside the area and profession. [For more information on non-compete agreements, see the article, “Should You Sign a Non-Compete?,” page 12, March 2007 Know the Law.]

Commissions
Q I promised to share part of my commission with a buyer I’m representing, and I sent a notice of intent to share commission to the buyer and the lender. However, the lender isn’t allowing me to share my commission with the buyer. May the lender forbid the sharing of commission?

A A lender has the right to put a limit on how much money may be contributed by parties other than the buyer to the purchase of a home.
 When entering into a commission-sharing agreement with a buyer,it’s advisable to include language that stipulates that the sharing is contingent on lender approval.

Also, in order to avoid confusion as to what happens if the situation arises, be sure to state that no commission will be shared if the lender doesn’t allow it.

Contracts
Q A buyer and seller have negotiated the terms of their agreement, and they’ve offered to pay me a fee to write the contract for them. Am I allowed to do this?

A No. This would be the unlicensed practice of law. Courts have determined that real estate licensees may prepare only contracts that are incidental to their real estate activity.

Escrow
Q I was representing a seller on a fully executed contract, but the deal fell through and the parties are fighting over the escrow. May the property be sold, or must I wait until the dispute is resolved before I relist it?

A Think of the cancellation of the contract and the release of escrow as two separate matters. If the contract has been cancelled and there are no claims such as specific performance being asserted against the property, the seller may go ahead and have the property relisted and even sold—even if there is an outstanding escrow dispute.

Federal Law
Q There are a lot of for-sale-by-owner (FSBO) properties in my area. I’ve been thinking of calling the owners to offer my listing services. Some of them are on the National Do-Not-Call Registry. Since their phone numbers are published in their ads and signs, is it permissible to contact them?

A You may always contact a FSBO if you have a buyer who’s interested in viewing or buying the property. Owners who have advertised their phone number are opening themselves to calls regarding interest in their property; however, it’s for that limited purpose only.

It’s not permissible to contact a FSBO to offer other services; doing so would be a violation of the federal do-not-call law.

To find out how to stay in compliance with this law, go to the Florida Association of Realtors®’ (FAR) Web site (www.floridarealtors.org), click on “Tools and Support,” and scroll down to “ Do Not Call Program.”

Landlord/Tenant
Q I’m a broker who provides property management services. A landlord has instructed me to transfer the funds I’m holding in my escrow account as advanced rents and security deposit to the landlord. Should I follow these instructions?

A It’s permissible as long as the broker obtains authorization from the landlord and the tenant to transfer the funds, and it’s recommended that the authorization be given in writing.

Additionally, it may be necessary to amend the lease agreement so that it accurately reflects who’s holding the advanced rents and security deposit.

Search through more Q&As online in the Legal Center.

FAR Members may speak with attorneys on a range of topics including licensing, contracts and landlord/tenant matters. Legal Hotline: (407) 438-1409