Featuring real estate articles and information to help real estate buyers and sellers. The Nest features writings from Georges Benoliel and other real estate professionals. Georges is the Co-Founder of NestApple and has been working as an active real estate investor for over a decade.
UCBA stands for RLS’ Universal Co-Brokerage Agreement. To increase transparency and ensure that the residential marketplace is fair to consumers, the UCBA has made it mandatory for offers of compensation to the buy-side broker to come directly from the Seller or Owner. Listing Brokers can’t offer compensation to the buy-side broker, even if it is on behalf of the Seller or Owner. Furthermore, Listing Brokers will not be responsible for the buy-side compensation anymore.
The UCBA has made revisions to Article IV to clarify the compensation offered by the seller to the buy-side broker. Additionally, new sample listing agreement compensation clauses are in exhibits H and I.
Responding to broker feedback, the RLS will now accept listings for professional and retail units within residential properties. Listings of such units in residential properties of five teams or less must comply with the “Simultaneity Rule” of the UCBA’s Article I, Section 5.
The RLS will add new data fields to define residential properties further to specify these units. Fields are Mixed-Use, Retail, Professional, and Office.
In real estate, there are Opt-Out listings that the Owner chooses not to submit to the RLS. The listing broker is required to fill out an Opt-Out form to the RLS.
The listing brokers can now share the Opt-Out listings with other brokers through personal one-to-one emails or phone calls.
The UCBA is clarified to ensure unsolicited offers may be conveyed to the Owner while an Exclusive Listing is under “Coming Soon” status.
However, listings must be in “Active” status to further engage with the party marking the offer.
The updated UCBA allows electronic fund transfers such as wire transfers, ACH payments, and digital wallet apps like Venmo and Zelle for rent, security deposits, and other payments.
Participants can use their firm’s dedicated escrow, or consumer funds account to hold the payment.
Starting from January 1, 2024, owners and sellers of exclusive properties must directly offer compensation to the broker representing the buyer. Listing brokers cannot make these offers on behalf of owners or sellers. Additionally, listing brokers will no longer be responsible for paying buy-side compensation.
The seller or Owner needs to provide a written offer of compensation to the buyer’s broker, which can be accepted, rejected, or negotiated.
The Universal Co-Brokerage Agreement (UCBA) version of January 2024 has new sample listing agreement compensation clauses that make it easier for the seller or Owner to convey their offer of compensation to the buyer’s broker.
If you have current listing agreements that are valid beyond January 1, 2024, you will not need to amend them to convey the seller’s or Owner’s offer of compensation to the buy-side broker. These agreements will run their course as usual.
However, suppose you need to extend or renew these agreements after January 1, 2024, when the new rules take effect. In that case, you should ensure that the seller’s or Owner’s offer of compensation is conveyed to the buy-side broker.
The RLS will still be the forum where the buy-side compensation is displayed, and you can enter the buy-side compensation. However, you must make sure that the buy-side offer of the compensation originates from your seller (or Owner), not from you, your fi, rm, or any other broker.
Assuming that the seller offers compensation and the buyer’s broker accepts it, the seller or the Owner of the exclusive property will directly compensate the buyer’s broker. This compensation should occur at the closing per the usual practice in the New York City area.
However, if the seller does not offer compensation to the buyer’s broker, the latter can negotiate their possible compensation from the buyer.
Yes, a buyer’s broker may reject the seller’s offer of compensation and negotiate with the seller, through the seller’s listing broker, over the terms of compensation.
The buyer’s broker may also seek to reject the compensation offer from the seller outright. The buyer’s broker negotiates their potential compensation from the buyer.
This change will be part of the latest edition of the UCBA, which takes effect on January 1, 2024.
The RLS strives to promote transparency and consumer confidence in the residential marketplace. These changes comport with Citysnap’s, the RLS’s consumer portal, and prominent display of buy-side compensation for each listing.
The RLS also believes that “decoupling” the buy-side compensation represents the future of how residential real estate is transacted. The RLS expects other listing services to follow this lead.
Yes, the January 2024 version of the UCBA:
Participants who violate UCBA rules will face financial penalties.
Effective immediately, participants of the Realtor Listing Service (RLS) are prohibited from utilizing any listings management technology system that facilitates searching for property listings based on compensation level.
This new regulation aims to assist agents in fulfilling their fiduciary responsibilities to clients by ensuring they are presented with properties that match their criteria rather than those offering higher compensation rates.
Starting January 2024, the UCBA has updated its compensation section. It clarified that the offer of compensation to the buy-side broker should come from the seller or Owner. Some brokers and agents have misunderstood the UCBA to provide a standard 50/50 split for all commissions in the RLS, which is not the case.
The previous versions of UCBA only provided a 50/50 split in rare situations where there was no written agreement on what the selling agent gets and what is offered to the buyer’s agent. However, the January 2024 version of UCBA removed this fail-safe provision to ensure the seller compensates the buy-side broker.