Missouri salesperson Carla is affiliated with Heartland Realty. She enters into a buyer representation agreement with client Ben. Without telling her broker, Carla also enters into a secret side agreement with Ben to receive an additional $2,000 cash payment directly from Ben at closing, on top of her regular commission. Under Missouri law, which of the following best describes the legal consequences of this arrangement?
Correct Answer
C) Carla has violated Missouri law by accepting compensation from a party to the transaction without her broker's knowledge and consent
Under RSMo Chapter 339, a Missouri salesperson may only receive compensation through their sponsoring broker—they cannot accept payment directly from any party to a transaction without the broker's knowledge and consent. Carla's secret side agreement with Ben violates this fundamental rule. Additionally, accepting undisclosed compensation from a client breaches Carla's fiduciary duty of accounting and loyalty, and may constitute a violation of the Missouri Merchandising Practices Act. MREC can discipline Carla for this conduct, and her broker could also face liability for failing to supervise.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The fiduciary obligations owed by a listing agent to the seller, including marketing the property, presenting all offers, and protecting the seller's confidential information.
A practice where the agent or brokerage represents only one party in a transaction — either the buyer or the seller, but never both.
A relationship where a listing broker authorizes other brokers to act as agents of the seller, extending the seller's agency relationship to cooperating brokers.
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