15.1 General #
You are required to immediately report problems to the Company that pertain to:
- Any party having questions or complaints, whether written or verbal, involving any listing agreement, purchase, lease, or other real estate transaction.
- Automobile accidents involving property damage or personal injury to you or others occurring while the Associate is engaging in Company business.
- Physical injuries within the office or while participating in duties on behalf of the Company.
- Criminal charges against you with the exception of minor traffic offenses.
- Civil lawsuits or administrative actions involving Company business.
- Anytime you are contacted by any state or local regulator or National Association of REALTORS® or the MLS for any matter that may pertain to an infraction, dispute, or disciplinary action.
- Threatened legal or administrative actions involving a real estate transaction.
- Any party who defaults under an accepted contract.
- Acts of discrimination or harassment committed by Associates or parties to transactions.
- Unresolved disputes between Associates within or outside the office.
You are also required to cooperate with the Company in the defense of a claim. You must promptly pay, to the Company, any amounts due hereunder upon notice to you from the Company.
Legal Defense
When a claim or demand is made, or a lawsuit or other action is filed, against either you or the Company by a third party which alleges any breach of any duty, error or omission, or negligence in the performance of “Professional Services,” as that term is defined in the Company’s Errors & Omissions Policy of Insurance, for activities covered by the Insurance Policy, the Company shall defend the claim, and the cost of such defense shall be allocated as set forth herein.
The Company has the right to make all decisions concerning the defense of the claim, including choice of counsel. In the event you object to any decision made by the Company, you may obtain your own attorney at your own expense; however, you shall not be relieved from the obligation to pay your portion of the cost of the claim as set forth herein.
If a question arises in which you feel that legal advice must be obtained, you will inform the Company, at which time the Company shall make the decision as to whether legal consultation is necessary. If legal consultation is required, the Company will consult with the attorney. Failure to follow these procedures will exempt the Company from responsibility for any legal expenses incurred.
Allocation of Costs of Defense
The Company carries an Errors & Omissions policy. This insurance is designed to protect the agent and the Company from errors during the practice of real estate. The policy does not cover items such as fraud. For items not covered by the policy, you shall be solely responsible for the cost of defense of the Claim, or to defend or protect against any potential or possible Claim where the Company or you are involved as a party, including attorney’s fees, and the cost of any settlement or a judgment (collectively the “Costs of Defense”), applicable for the transaction or prospective transaction that led to the Claim, whether or not the transaction actually closed. In the event that the E&O policy will not cover the claim or if the claim can be settled for less than the deductible, and you choose not to settle and wish to pursue further negotiations, the Costs of Defense shall be solely your responsibility.
You shall be solely responsible for the Costs of a claim if you fail to follow any law, regulation, or Company policy as set forth in this Policy Manual, and that failure results in a judgment or other final adjudication based on that failure.
You shall be solely responsible, and shall reimburse the Company, for all of the Company’s Costs of Defense if a judgment or other final adjudication on any Claim averse to the Company and/or you:
- Establishes that dishonest, fraudulent, criminal, or malicious acts, errors or omissions were committed;
- Results in a finding of intentional tort, slander, defamation, or any conduct which leads to the imposition of punitive, exemplary or multiple damages, or fines or penalties; or
- Establishes discrimination on the basis of race, creed, religion, ethnic background, national origin, age, sex, handicap, familial status, physical disability, sexual preference, or any other unlawful classification.
The Company will not pay the attorney fees nor the cost of defending, nor will it pay the cost of settlement or judgment, involving any claim:
- That does not involve the business operations of the Company;
- That seeks redress for actions outside the scope of your Independent Contractor Agreement;
- That is based on or arising out of the formulation, promotion, syndication, or operation or administration of any limited or general partnership, property syndication, real estate investment trust, joint venture or corporation, or any interest therein;
- That is based on or arising out of bodily injury or property damage; or
- That is excluded from the Errors & Omissions Insurance Policy.
You agree to promptly accept a tender of defense on any such claims and pay the entire Costs of Defense incurred, including any Company attorney’s fees. The Company shall have no obligation to bring a legal action, mediation, or arbitration on your behalf to recover a disputed commission or other allegation. The Company shall participate in the costs and fees of prosecuting such a claim only if the Company agrees to do so; the costs shall be allocated between you and the Company as outlined in the Independent Contractor Agreement.
15.2 Disputes during Escrow #
If a dispute arises during an escrow between the seller, buyer, the listing or cooperating Broker, third-party vendors, servicers, or other entities, and/or the Company:
- Which cannot be resolved by negotiations between the parties and the agent(s) involved; and
- Company determines that it is in the best interest of the Company to resolve the matter during escrow rather than risk a potential claim or litigation after close of escrow or for another reason; the Company has the right to negotiate a resolution of the dispute on its own behalf, and on the behalf of the Associate, which may involve a reduction in the commission to be received, and/or a credit given to one of the parties. In that event, regardless of actual Company or agent liability or responsibility in the dispute, the Associate and the Company will participate in the commission reduction or credit pro rata in the same proportion as the commission split(s) of the agent(s) involved for that transaction.
15.3 Agent Owned Property #
Any property in which you have, or will acquire, an ownership, financial, or other legal interest, either wholly or partially, is “Agent-Owned Property.” The purchase, sale, or lease of Agent-Owned Property are transactions that need to be completed with the brokerage, unless otherwise agreed in writing. You must generally comply with the same contract, disclosure, and other requirements for Agent-Owned Property as with other transactions. The Company’s E&O Insurance Policy governs insurance coverage of the sale or purchase of any Agent-Owned Property. In any sale, purchase, or lease of Agent-Owned Property not covered by the E&O Insurance Policy, you shall be solely responsible for costs of defense, settlement or judgment on any claim, suit, or action of any nature arising there from, regardless of whether you handle the matter as Company business or as your own personal transaction. In the event you are selling or purchasing Agent-Owned Property, you must:
- Notify your Manager in advance.
- Obtain, in advance, your Manager’s approval of all marketing material and disclosure documents; any purchase contract provisions prior to their execution; and any correspondence or other writings that pertain to the purchase or sale.
- Not act as the listing agent on the sale. You must list any Agent-Owned Property with another salesperson in the office.
- Not represent buyers or prospective buyers in the sale of Agent’s Property.
- Notify your Manager immediately in the event that any of the Company’s agents writes an offer on your Agent-Owned Property.