This is the fourth episode in our new video series depicting the seismic shift in the representation of buyers in 2025, cementing long-standing public policy.
This series dramatizes:
- the origin of the “same-percentage, same-split” industry custom being unwound by recent legislation;
- the contents of the newly-mandated buyer representation agreement, also called a BRA;
- critical rules surrounding retainer periods, and how buyer representation is extended or modified; and
- your practical use of the buyer representation forms as depicted through various sample transactions and scenarios.
Why this episode matters: Different buyer representation retainer period and extension rules apply when the buyer-client is an individual versus an entity. Watch the critical distinctions here.
Representing an individual versus an entity
The buyer representation agreement retainer period is limited when the buyer is an individual. [Calif. Civil Code §1670.50]
This is in contrast to buyers which are entities, such as:
- corporations;
- real estate investment trusts (REITs);
- limited liability companies (LLCs); and
- partnerships.
The broker’s retainer period for services to be rendered to individuals under a representation agreement may initially run no more than three months from the date the agreement is signed and received by the broker. [CC §1670.50(d)(1); see RPI Form 103.1 §1.1]
However, when the buyer-client is an entity, they may agree to a retainer period for whatever duration the broker and buyer negotiate. [CC §1670.50(d)(1); see RPI Form 103.2 §1.1]
Further, the expiration of an entity’s retainer period may be extended by modifying the representation agreement. With an entity as the buyer-client, the broker is not restricted by the three-month limitation on the retainer period which exists when representing individuals. [CC §1670.50(d)(1); see RPI Form 103.2A]
Editor’s note — An inter vivos trust, also known as a living trust, is not an entity but is an individual. The buyer is the individual who established the inter vivos trust and is the initial beneficiary with the right to remove the property from the trust vesting.
The expiration of the retainer period for an employment with an individual buyer may not be extended, automatically or otherwise. However, the buyer representation agreement may be reset for a new three-month retainer period by a separate renewal agreement entered into with the buyer. [CC §1670.50(d)(2); see RPI Form 103.1A]
Often, the employment objective of getting a property under contract before the representation period expires is not achieved. However, the individual buyer intends to continue to work with their agent to locate and acquire a suitable property. Here, the buyer representation agreement may be renewed by using a written renewal agreement form, dated and signed by all participants. [See RPI Form 103.1A]
This is also but a minor variation on an existing theme.
Previously, an exclusive listing needed to contain a specified period of employment set by an expiration date of the employment, say, three or six months, after its commencement. When an expiration date is not included in an exclusive listing, the broker faces suspension or revocation of their license by the Department of Real Estate (DRE). [Bus and PC §10176(f)]
As before, use of an exclusive employment agreement provides greater incentive for brokers and their agents to perform their duty to work diligently and continuously to meet their buyer’s objective.
Related video:
Editor’s note – In the next two episodes, we’ll depict your practical use of the buyer representation forms through various sample transactions and scenarios.
