FACTS: The agent created a limited liability company upon the advice of her CPA.  The agent has subsequently instructed the brokerage to pay all of her commissions earned to the limited liability company.

ISSUE: May the brokerage pay commissions to the agent’s limited liability company?

ANSWER: Probably not.

DISCUSSION:

A.R.S. § 32-2155 allows a brokerage to pay a commission only to a real estate licensee.  A real estate licensee may hold her license in a professional corporation or a professional limited liability company.  Id.  If the agent holds her license in one of those types of entities, then payment of the commission by the brokerage to that entity is acceptable.  Here, based on the facts presented, the entity at issue is a limited liability company, which may not hold a real estate license.  Therefore, the payment to the agent’s limited liability company is not permissible.