Glossary / Funding and payment
Also known as: Commission assignment, irrevocable direction to pay
An assignment of commission is a written transfer of a broker's right to receive some or all of a commission to a third party, such as a commission advance company. It usually needs the brokerage's consent because the commission is typically owed to the firm first.
An assignment moves the right to be paid from you to someone else. In the commission context, a broker assigns part or all of a commission to a third party, and the brokerage is instructed to pay that party directly when the commission arrives.
Because the landlord's commission is usually payable to the firm under the listing or commission agreement, the individual broker cannot redirect it alone. NC REALTORS explains that "a broker must get approval from an authorized representative of the firm in order to assign his or her share of the commission to a third party." The same guidance says the assignee does not need a real estate license when it is merely being assigned an earned commission, and cites a North Carolina rule that a broker "shall not require or demand" that a closing attorney pay a commission to another person.
An assignment does not change how much the landlord pays. It changes who receives part of it, and when you get your cash. It is the mechanism most early-payment arrangements, including a Commission advance, rely on to get repaid.
Enforceability matters to you and to any funder. Whether an assignment holds up depends on state law and on the contract terms. Rules vary by state and by contract, and this is not legal advice.
Get your brokerage's written consent before you assign any commission, and confirm the exact amount being assigned in the same document.
