Glossary / Commissions and splits
Also known as: BOR, designated broker
Broker of record has two common meanings: the licensed broker legally responsible for a brokerage firm and its agents, and the broker a client has formally designated in writing to represent it. In commercial leasing, both can affect who is paid a commission and how.
In the first sense, Inman describes the designated broker, also called the broker of record, as the broker "recognized by a state regulator as the responsible broker for the supervision and management of real estate agents and activities," including trust fund handling. Under30CEO gives the same meaning. State laws use different titles for this role.
In the second sense, common in insurance, Vouch describes a broker of record as the person or firm "officially authorized" to represent a company, usually confirmed by a short letter. In commercial leasing, the question of which broker the parties recognize is usually handled through brokerage and commission agreements. The New York City Bar's model office brokerage agreement, for example, names the broker's agents and says they "shall not be replaced without Landlord's prior written consent."
At the firm level, your commission generally flows through the brokerage. Colorado law, for example, makes it unlawful for a broker employed by another broker to accept a commission from anyone except their employing broker, so payment timing depends on the firm as well as the landlord.
At the deal level, being the recognized broker can decide whether the landlord pays you. NYC Housing Authority's published guidelines, for example, recognize a broker when the prospective tenant's completed application is delivered under the broker's cover, and that recognition lasts twelve months for that development only. Rules differ by landlord, contract, and state, and a dispute may come down to Procuring cause.
Get your client's designation of you in writing and make sure the landlord acknowledges it before negotiations start.
