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Part Two(c) of Five: Buyer/Tenant Employment Agreement Addendum

This article and frequently asked questions (FAQs) is part two “c” (2c) of a five part series that will introduce the forms prior to their publication on August 1, 2024.

The new Buyer/Tenant Employment Agreement Addendum can be found here.

Lines 1-2 identify the buyer or tenant and their broker.

Lines 3-5 identify the agreement between the parties and the date the agreement was entered into.

Lines 7-16 allow three (3) potential terms that could be modified or added via click box:  The first is to modify Broker Compensation; the second is to modify the Term Expiration; and the third is any other term to be modified or added.

Lines 17-29 allow two (2) potential ways to cancel the agreement via click box.  The first includes no conditions to mutually cancel.  The second provides the parties space to include conditions that must be met for the cancellation to be effective.  Both cancellations include a mutual release.

Q1Why aren’t Listing Contracts included in this Addendum?

A1. Listing Contracts have their own addendum which has been revised and generally matches the Buyer/Tenant Employment Agreement Addendum.  Furthermore, Listing Contracts and their addendum are Multiple Listing Service forms.  These entities are separate and distinct from the Arizona REALTORS® and they may choose to use, not use, or provide alternative forms in their discretion.

Q2. What if the buyer and buyer broker want to modify the “Broker Compensation” for just one property?

A2. Best practice would be for the buyer and buyer broker to specify the new “Broker Compensation” amount and specify it only applies to the one property on lines 9-10.

Q3Cancellation is not a term of an agreement, why was it included in an addendum form?

A3. The workgroup felt cancellation of an agreement occurred often enough to include it in the addendum.  It therefore segregated the option to cancel from the revisions and titled it as a separate section to emphasize the distinction.

Q4Why was the ability to add prerequisites to cancellation included?

A4. The workgroup felt a number of buyer brokers include certain conditions upon cancellation, such as property exclusions, tail clauses, or representations of the buyer (e.g. “I am no longer interested in buying a property”).  In such circumstances, the parties can include whatever specific conditions they want to facilitate their wishes. 

Aaron M. Green, Esq., a licensed Arizona attorney, is the General Counsel for the Arizona Association of REALTORS®.  This article is of a general nature and reflects only the opinion of the author at the time it was drafted.  It is not intended as definitive legal advice, and you should not act upon it without seeking independent legal counsel.