In this monthly column, Anthony Askowitz explores a hypothetical real estate situation from both sides of the broker/agent dynamic.
An established, veteran agent has been partners with her daughter at an office for five years, but circumstances have caused them to split acrimoniously. Should the broker back his longtime agent, play the arbitrator or not get involved at all?
What a nightmare! After raising my daughter, encouraging her to study and practice real estate, and training her in the business, she quickly excelled, and we became partners. For five amazing years we were a total powerhouse, consistently listing and closing big sales and earning top honors from our office. We complimented each other perfectly, with her as the energetic, tech-savvy go-getter and me as the big-picture, “sage wisdom” closer.
But that’s all over now. For reasons I won’t get into here, we have irreconcilable differences and the partnership will be dissolved. But if it were “only” that simple! I have irrefutable proof that she has taken some of my long-term clients for her own, and she is equally convinced that I have shortchanged her on certain commissions she claims are rightfully hers.
As if the personal pain of this break-up was not bad enough, I now must also navigate these complicated professional matters, all while trying to run a business (and maintain some semblance of family unity). My broker has been supportive through it all, but I feel like he’s also holding back a bit. I can respect that he has an office to run and must appear neutral, but shouldn’t he back the agent who has been here for decades, not years?
As a broker, I never want to get in the middle of disagreement between any two agents, and partnership conflicts are especially difficult. My standard practice is to encourage the members to try to work things out between them as best they can, and to only consider a breakup as a last resort. The termination of a family team or partnership is obviously even more volatile, and requires higher degrees of sensitivity to tamper down conflicts.
Here’s the thing — if it has reached this point, and all of us have done our jobs correctly, the road map to outlining the division should already be prepared.
How to resolve
It begins with a clear company policy regarding teams and partnerships. Whenever teams are joining or forming within an office, a good team policy would require the agents to have a written team agreement. (In fact, some states now require the broker to maintain a database of teams and to identify which team member is the leader responsible for that team, which is helpful for all parties.)
The broker can assist the agents in drawing up these agreements, to ensure that they cover a wide variety of different and possible contingencies. Some of them are basic and obvious, such as assigning different responsibilities — not only for tasks, but also for payment of expenses — and outlining percentage splits. Some of them are not so obvious and in many cases, extremely awkward. What is the plan if a team leader suddenly decides to retire? What if a team member loses his/her license? What happens to pending business when a team member leaves, or the team is dissolved?
Partnerships, and especially family partnerships, can be even more complex. Happily married couples who decide to partner up, for example, must have the difficult conversations about what would happen in case of divorce … or death. These “prenuptial” agreements can be extremely uncomfortable, but necessary to avoid the challenges presented by this situation. A good idea would be for two or more agents working together to begin as a team, and only establish a formal partnership years into the relationship, so that there is a clear identification of the leader, roles, strengths, etc.
In rare cases where conflicts are irresolvable, as an absolute last resort (and to avoid litigation), the broker may decide to retain a corporate attorney to act as an impartial, third-party judge; similar to what would happen in a traditional courtroom. Both sides of a dispute can then be given the opportunity to present evidence and testimony, and to ask questions of the opposing party. The attorney can then process and analyze the information and make a formal recommendation to the broker, who can then accept, deny or alter the recommendation as they see fit.
Anthony is the broker-owner of RE/MAX Advance Realty in South Miami and Kendall, where he leads the activities of more than 165 agents. He is also a working agent who consistently sells more than 100 homes a year. For two consecutive years (2018 and 2019), Anthony has been honored as the “Managing Broker of the Year” by Miami Agent Magazine’s Agents’ Choice Awards. NOTE: Anthony is not an attorney and does not give legal advice. Please consult a licensed attorney regarding matters discussed in this column.
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