Question 83

The clause designed to ensure that a broker will receive a commission after the listing has expired is called an extension or 'tail' clause.

An extension or 'tail' clause allows a broker to receive a commission if a transaction is completed with a buyer who was introduced during the listing period, even after the listing has ended.

A) an acceleration clause.

An acceleration clause is typically related to loan agreements and allows a lender to require full repayment of a loan if certain conditions are met, such as default. It does not pertain to broker commissions or listings, making it an incorrect choice in this context.

B) an alienation clause.

An alienation clause is a provision in a mortgage that allows the lender to demand full repayment if the property is sold or transferred without their consent. This clause does not relate to broker commissions or the duration of listings, rendering it incorrect for this question.

C) a coinsurance clause.

A coinsurance clause is related to insurance policies, particularly in property insurance, and refers to the requirement for the insured to maintain a certain percentage of the property value in coverage. It has no connection to real estate brokerage or commission structures, thus it is not applicable here.

D) an extension or 'tail' clause.

An extension or 'tail' clause explicitly allows brokers to earn a commission from transactions initiated during the listing period, even if those transactions close after the listing has expired. This accurately describes the function specified in the question, making it the correct answer.

Conclusion

The extension or 'tail' clause is essential for protecting brokers' rights to commissions from buyers contacted during the listing period. Options A, B, and C do not pertain to the context of real estate commission structures, which confirms that D is the only appropriate choice. Thus, it effectively addresses the scenario outlined in the question.