66. Two salespersons from different firms agree to work together on a commercial building one has listed. The listing salesperson agrees to directly pay the other salesperson 25% of the listing commission for this help. Which of the following statements BEST describes this agreement?
Answer: D
This agreement is unacceptable because salespersons may not share commissions directly.
The arrangement between the two salespersons is considered unacceptable as it violates the standard regulations regarding commission sharing. Salespersons are prohibited from directly sharing commissions unless specific conditions are met, which are not present in this scenario.
A) It is acceptable because both salespersons have agreed to the conditions
While mutual agreement is important in business transactions, it does not override the regulations governing commission sharing in real estate. The lack of adherence to these regulations renders the agreement unacceptable, despite the consent of both parties.
B) It is acceptable because salespersons are free to share commissions with other salespersons
This statement is incorrect as it implies that salespersons have unrestricted freedom to share commissions. In reality, commission sharing is heavily regulated, and such arrangements typically require compliance with specific legal and ethical guidelines, which this agreement does not fulfill.
C) It is unacceptable because the agreement to share commissions was not in writing
Although written agreements are generally advisable for clarity and enforceability, the primary issue in this case is not the absence of a written agreement but rather the fundamental prohibition against direct commission sharing between salespersons. Therefore, this explanation misses the core violation.
D) It is unacceptable because salespersons may not share commissions directly
This statement accurately reflects the essence of the situation. Real estate regulations often prohibit direct commission sharing between salespersons unless certain formalities are followed, which are absent in this agreement. Thus, this option correctly identifies the reason for the agreement's unacceptability.
Conclusion
The agreement is definitively unacceptable due to the prohibition on direct commission sharing among salespersons. Options A and B incorrectly suggest that mutual consent or freedom to share commissions can override regulatory standards. Option C, while highlighting a potential issue, fails to address the core regulatory violation, making Option D the only correct answer.