California Real Estate Practice Exam

At the time of his death, Broker "A," a licensed real estate broker, had 18 listings. He left his estate to his son, "B," who is also a licensed real estate broker. If "B" wants to collect any commissions on the sales of the 18 listings, he must:

1. notify each owner that the commissions would be payable to him in lieu of his father

2. renegotiate new listing contracts with each of the 18 owners

3. take "quiet title" court action to authorize collection

4. do nothing

The correct answer is: notify each owner that the commissions would be payable to him in lieu of his father

In this scenario, for Broker "B" to collect commissions from the listings his father left behind, he must formally notify each property owner that he is assuming the right to receive commissions in place of his deceased father. This step is crucial because listing agreements are personal contracts between the broker and the property owner. When a broker passes away, there is a legal question about the continuity of those agreements. By notifying each owner, Broker "B" clarifies that he is the new point of contact and that any commissions related to the listings will be directed to him, which maintains the contractual relationships established by his father. Other options fall short. For instance, renegotiating new contracts might be overly burdensome; the existing agreements could still hold value, and the owners may not agree to new terms. Taking a "quiet title" action is unnecessary since it primarily applies to disputes over property title rather than the assignment of commission rights. Doing nothing would not allow Broker "B" to collect the commissions, as the original agreements require acknowledgement of the change in beneficiaries by the property owners. Thus, actively notifying each owner is the most effective and legally sound approach to ensure he receives the commissions owed from the listings.