Because the licensee’s services are unique, a brokerage agreement cannot be assigned to another licensee without the principal’s written consent. The property owner cannot force the licensee to perform, but the licensee’s failure to work diligently toward fulfilling the contract’s terms constitutes a breach of the listing agreement. If the licensee cancels the listing, the seller may be entitled to sue the licensee for damages.
On the other hand, a property owner could be liable for damages to the licensee by refusing to cooperate with the licensee’s reasonable requests, such as allowing the licensee to show the property to prospective buyers or refusing to proceed with a complete sales contract.
Listing agreements may be terminated for the following reasons:
- When the agreement’s purpose is fulfilled, such as when a ready, willing, and able buyer has been found
- When the agreement’s term expires
- If the property is destroyed or its use is changed by some force outside the owner’s control, such as a zoning change or condemnation by eminent domain
- If title to the property is transferred by operation of law, as in the case of the owner’s bankruptcy or foreclosure
- If the sponsoring broker and the seller mutually agree to cancel the brokerage agreement
- If either the sponsoring broker or seller dies or becomes incapacitated. If the sponsored licensee dies or becomes incapacitated, the brokerage agreement is still valid.
Expiration of Brokerage Agreement
All exclusive brokerage agreements should specify a definite period during which the broker is to be employed. In Illinois, as in most states, failing to specify a definite termination date in a listing is grounds for the suspension or revocation of a real estate license.
Automatic Extension
Pursuant to Section 10-25 of the Illinois Real Estate License Act of 2000, no licensee shall obtain any written brokerage agreement containing a clause automatically extending_the period of the contract.
SAFETY CLAUSE
This is a clause in the listing agreement which provides the listing broker a commission if, within a specified time period after the listing agreement expires, the owner transfers property title to someone who saw the property while it was listed with the broker. The Safety clause protects brokers from losing a commission on a sale involving buyers who saw the property while it was listed and to discourage others from trying to reach private arrangements with sellers.
Safety Clause Features
- The length of time for a Safety clause is set by agreement.
- Any new buyers the seller might procure on her own after expiration of the listing are not affected.
- This clause cannot be enforced if the property is relisted under a new contract with another brokerage firm.
Each brokerage agreement for a residential property of four units or less that provides for a protection period subsequent to its termination date shall also provide that no commission or fee will be due and owing pursuant to the terms of the brokerage agreement if, during the protection period, a valid, written brokerage agreement is entered into with another licensed real estate broker.
