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Listing Agreements May Not Contain an Automatic Renewal Provision

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FACTS:                    

The seller and the listing broker have agreed to provide in the listing agreement for an automatic 60-day renewal provision. 

ISSUE:                      

Can a listing agreement provide for an automatic 60-day renewal provision similar to property management agreements? 

ANSWER:                

Probably not.  

DISCUSSION:         

All real estate employment agreements, including listing agreements, must have a definite inception date and expiration date.  A.R.S.§ 32-2151.02(A)(3).  Although property management agreements can have an automatic renewal provision under certain circumstances, a property management agreement is not a real estate employment agreement as defined by A.R.S.§ 32-2151.02(E).  A listing agreement therefore cannot contain an automatic renewal provision. 

Note: Property management agreements may contain an automatic renewal provision only if “the property management firm sends the owner a notice at least thirty (30) days before the renewal date.”  A.R.S.§32-2173(A)(2)(a).