The baseline is that a Broker doesn’t own the listing or the buyer representation agreement. Those agreements belong to the brokerage [through the managing Principal Broker (PB) who is the registered point of contact for OREA]. Per ORS 696.800(1), the Broker who works with the client is, in fact, the agent of the managing PB, duly authorized to act in the PB’s stead when interfacing with the client for the purposes of purchasing or selling property. When a Broker leaves a brokerage, there are occasionally situations where the Broker tells the clients to follow them to the new brokerage [sometimes without permission from the previous brokerage’s PB]. In the strictest sense, the broker — who is bringing their former clients over to the new office without permission — is potentially violating ORS 696 and could be punished by OREA under ORS 696.301(6) for intentional interference with the contractual relations of others concerning real estate or professional real estate activity. In the simplest terms: when you leave the brokerage, they aren’t your client anymore; ongoing interference with that client’s transaction is frowned upon and potentially detrimental to the broker’s career.
That’s not to say the broker leaving the office is left adrift and forced to build up from zero when they leave. OAR 863-014-0063(6) explains that a broker can “Continue to engage in professional real estate activity on transactions that began while associated with the sending principal broker [the previous brokerage’s supervising PB].” To continue working with those former clients, OAR 863-014-0063(6) has several additional requirements:
- The broker can only continue to work on transactions where there was a fully executed contract, an active written offer, counter offer, or letter of intent [if you were just advertising the property or just showing the client comps, it does not transfer];
- The involved client must give “documented approval” [get the approval in writing];
- The previous PB and new PB must have a written agreement that:
- Identifies which PB is responsible for supervision and record retention on the various transactions that are being transferred;
- Identifies the transactions that are being transferred/transactions on which the broker will keep working;
- States the effective date of the agreement;
- “Address[es] agency relationships.” This is generally understood as a requirement that the written transfer agreement between the brokerages must have some sort of process or plan for transferring, terminating, and reestablishing, or otherwise moving the principal-agent relationship from the sending/former brokerage over to the receiving/new brokerage;
- Specify how compensation will be handled [it’s not just all or nothing; if the transfer occurs halfway through a transaction, the brokerages can split or share the compensation according to time/effort expended to the point of the transfer];
- Is signed by the old PB, the new PB, and the transferring broker.
If an agreement is put in place that addresses all of the above points; the broker is able to continue working with their former company’s clients without fear of violating agency rule or state law.