A broker holds a 90-day open listing on a California property and shows it to a prospective buyer, who makes no offer. The listing expires with no sale. Two weeks after expiration, that buyer contacts the seller directly and buys the property. Under what circumstance is the broker most likely entitled to a commission?

Correct Answer

C) Only if the listing contained a safety clause covering that buyer and the sale closed within the protection period

An open listing pays the broker who is the procuring cause of a sale, but the broker's right to be paid ends with the listing term unless the contract carries it forward. A safety clause, also called a protection or extender clause, does exactly that: it entitles the broker to a commission if a prospect the broker introduced, and under the standard California forms identified to the seller in writing before expiration, buys within a stated period after the listing ends. Without such a clause the seller may sell to that buyer after expiration and owe nothing. With one, a purchase two weeks after expiration by a registered prospect is compensable.