California Real Estate SalespersonLaws of Agency and Fiduciary DutiesMedium
Two cooperating brokers dispute which of them was the 'procuring cause' of a completed sale for commission-splitting purposes. Which best describes how this dispute is typically resolved in California?
- AThe buyer decides which broker receives the commission
- BIt is typically resolved through MLS or association arbitration, not by the DRE
- CThe listing agreement automatically awards the full commission to the listing broker
- DThe DRE issues a binding ruling on procuring cause
Show answer & explanationAnswer & explanation
Correct answer: B. It is typically resolved through MLS or association arbitration, not by the DRE
Procuring cause disputes between cooperating brokers are contractual matters typically resolved through arbitration procedures established by the Multiple Listing Service or local Realtor association, not through DRE licensing action, since the DRE does not adjudicate commission disputes between brokers.
Why the other options are wrong
- A. The buyer has no authority over commission allocation between cooperating brokers.
- C. The listing agreement doesn't automatically resolve procuring cause disputes.
- D. The DRE regulates licensing conduct, not commission disputes between brokers.
Procuring Cause Dispute
A disagreement between cooperating brokers over which one caused the ultimate sale, resolved through arbitration rather than by the DRE.
- DRE does not resolve commission disputes
- MLS/Realtor association arbitration is the common venue
- Based on unbroken chain of events leading to the sale
Memory trick: Brokers battle it out at arbitration, not at the DRE's door.