Broker-Level NAR Settlement Compliance

Exam: Real Estate Broker — Texas Chapter: Chapter 2 — Texas Agency Law Effective: August 17, 2024 (national rule; applies in Texas)

---

Overview

The NAR Settlement obligations extend beyond individual agents — brokers are responsible for firm-wide compliance. A broker who fails to implement firm-wide policies for buyer agreements and MLS compensation compliance faces both TREC disciplinary exposure and NAR/MLS sanctions.

---

Broker Firm-Wide Obligations

1. Written Buyer Representation Agreements — Firm Policy Required

• Brokers must establish a written firm-wide policy requiring all agents to obtain buyer representation agreements before showing any property
• This is not optional or agent-by-agent — it must be a firm policy with documented procedures
• The agreement must specify the agent's compensation amount or formula
• Brokers should maintain records showing agents are complying

2. MLS Compliance — No Offers of Buyer-Agent Compensation

• Brokers must ensure no agents submit listings with MLS offers of buyer-agent compensation
• All MLS listings by the firm must conform to post-August 17, 2024 rules
• Brokers should audit listings to confirm compliance
• Firm policies should address how compensation will be discussed with sellers and negotiated in contracts

3. Compensation Transparency Requirement

• Sellers can still agree to pay the buyer's agent — negotiated off-MLS
• Compensation is typically addressed in the purchase contract or a separate addendum
• Buyers' agents must disclose their compensation to buyer clients
• Agents must not accept compensation that exceeds what was disclosed in the buyer representation agreement

---

Broker Liability for Agent Non-Compliance

TREC expects brokers to supervise agents' compliance with both: 1. The NAR Settlement rules (buyer agreements + MLS compensation ban), AND 2. TREC's parallel buyer agreement requirements under Texas licensing law

| Agent Violation | Potential Broker Consequence | |---|---| | Showing property without written buyer agreement | Broker supervision failure; TREC disciplinary exposure | | Listing with MLS buyer-agent compensation offer | MLS sanction; potential TREC action against broker | | Accepting compensation not disclosed in buyer agreement | Agent and broker liability |

> Individual agent violations can create broker disciplinary exposure. TREC treats failure to supervise compliance with compensation rules the same as other supervision failures.

---

Required Broker Actions (Checklist)

• [ ] Adopt written firm policy: written buyer agreements required before any showing
• [ ] Train all agents on the August 17, 2024 rule changes
• [ ] Audit MLS listings to ensure no compensation offers appear
• [ ] Establish procedure for how buyer-agent compensation will be negotiated
• [ ] Document that agents have been notified and trained
• [ ] Incorporate buyer agreement compliance into transaction file review

---

Exam Tips

> Broker is responsible for firm-wide compliance with the August 17, 2024 buyer agreement requirement. Individual agent violations can create broker disciplinary exposure — this is the broker exam-specific angle on the NAR Settlement.

• Know that sellers can still pay buyer's agent — off-MLS, in the purchase contract
• Know that MLS compensation offers are prohibited (not compensation itself)
• Know that brokers must have a written firm policy — not just individual agent awareness
• This topic sits in Chapter 2 (Agency Law) because it directly governs the buyer-broker relationship and how agency is established and compensated

---

Tags: #RealEstate #Texas #Broker #Chapter2 #NARSettlement #BuyerAgreement #MLSCompensation #BrokerCompliance #Supervision #AgencyLaw #August2024