Broker Fee Agreement Requirements in South Carolina

A broker fee agreement in South Carolina must be a written, signed contract that contains every one of the twelve terms listed in Section 40-57-135(I)(2) of the state real estate licensing statute. The rule applies to listing agreements and buyer’s representation agreements alike. Leave out a required term and the agreement can be unenforceable, which means the broker may have no legal basis to collect a fee and the client may have no clear record of what was promised.¹

The Twelve Required Terms

Section 40-57-135(I)(2) is specific about what belongs in a listing or buyer’s representation agreement. Every one of the following must appear:¹

A description of the services the broker will perform, including how the brokerage firm handles dual agency, designated agency, and transaction brokerage if it offers those arrangements.
The compensation amount, stated as a flat dollar figure, a percentage, or another formula described clearly enough to calculate.
The event that triggers the broker’s right to the fee, such as closing or lease signing.
How the commission will be split with any other broker who shares in it.
Any retainer or upfront payment, with the conditions under which it is refundable.
Specific beginning and ending dates for the relationship.
Signatures of all parties.
Explicit language stating the agreement terminates on the expiration date unless the parties sign a written extension.
The type of representation, identified as either an “exclusive agency” agreement or an “exclusive right to represent” agreement where applicable.
Any variation from the standard commission, along with the circumstances that trigger the different amount.
Delivery of a copy to the buyer or seller at signing or immediately afterward.
A property description. For a listing, that means a legal description or other detail sufficient to identify the property, plus the listing price. For a buyer’s agreement, that means the type and price range of property the buyer is looking for.

The property description requirement is the one most often shortchanged. A buyer’s agreement that says “residential property in the Charleston area” without a price range does not satisfy the statute. A listing agreement without enough detail to identify the specific property falls short in the same way.

Transaction Brokerage Agreements

When a broker is not representing anyone as a client and acts instead as a transaction broker, Section 40-57-135(I)(3) still requires a written compensation agreement. That agreement must be signed by the transaction broker and by the party responsible for paying the fee, and it must identify both the compensation amount and who pays it.¹ The twelve-term list for client agreements does not apply in the same form, but the writing and signature rule still does.

Buyer Agreements and the Pre-Tour Signing Rule

South Carolina already required written buyer’s representation agreements before the National Association of Realtors settlement took effect in August 2024. The settlement added a timing rule on top of state law: an agent working with a buyer must have the written agreement in place before the buyer tours a home, and offers of compensation between brokers can no longer appear on multiple listing services, though compensation can still be negotiated off-MLS.²

For a buyer, that means signing a representation agreement earlier than you might expect. The agreement will state exactly what you owe the agent and when, and once it is signed, those terms govern the relationship for its stated duration.

Negotiating the Compensation Terms

South Carolina does not set broker commission rates. The fee is negotiable in every case and becomes binding only when both sides agree in writing.¹ Flat fees, percentages, and tiered structures that change at price thresholds are all permitted, as long as the method of calculation is spelled out. Any retainer or administrative fee a broker collects must also be disclosed in the agreement, including whether it credits against the final commission or stands as a separate charge. Undisclosed fees are a basis for discipline.

Who Can Legally Receive the Fee

Only a person holding an active South Carolina real estate license may collect broker compensation. Section 40-57-20 makes it unlawful to act as a broker, associate, or property manager without a valid license.¹ A licensed associate cannot be paid directly by a client or by a cooperating broker; the money has to flow through the broker-in-charge or property manager-in-charge for whom the associate works.

Paying anyone unlicensed for activity that requires a license is itself a violation. Under Section 40-57-710(A)(12), the commission can discipline any licensee who pays an unlicensed person for licensed real estate work, and referral or finder’s fees to unlicensed non-parties are also prohibited.¹ Unlicensed employees working under a broker-in-charge cannot be paid in a way that ties their pay to commission splits or sales amounts.

Electronic Signatures

A broker fee agreement signed electronically is enforceable in South Carolina under the federal Electronic Signatures in Global and National Commerce Act. The E-SIGN Act lets an electronic record satisfy any legal requirement for a written document, provided the signer has given informed consent to receive records electronically.³

Before taking that consent, the broker has to give a clear statement covering the signer’s right to a paper copy, the right to withdraw consent, the process for withdrawing it, and the hardware and software needed to access the record. The signer then confirms consent in a way that demonstrates they can actually open the document format being used. A verbal okay does not qualify; oral communications are specifically excluded.

Disclosure of the Brokerage Relationship

Before fee terms get negotiated, a licensee must give every potential buyer and seller a meaningful explanation of the brokerage relationships the firm offers, including the difference between customer service and client service, at the first practical opportunity for substantive contact. The broker must also present the Disclosure of Brokerage Relationships form the commission prescribes.¹

An acknowledgment of receipt belongs in the agency agreement itself and in every sales contract, and each sales contract has to show whether the buyer and seller received customer or client service in the transaction. Skipping the disclosure is a separate violation from any defect in the fee agreement.

What Can Go Wrong

Section 40-57-710(A) gives the Real Estate Commission more than a dozen grounds to discipline a licensee. The ones that bear on fee agreements include substantial misrepresentation in a transaction, false or misleading promises, bad faith or dishonesty that endangers the public, failing to account for trust funds, and receiving compensation from more than one party without written disclosure to everyone involved.¹ A broker who buries fees in closing costs, misstates a commission split, or quietly collects from both sides risks suspension or revocation.

A missing statutory term in the agreement itself creates a different problem. The contract may not be enforceable, which can leave the broker without a route to collect even on work actually performed, and leave the client without a clear record of what was agreed.

Where Fee Disputes Get Resolved

If a disagreement over a broker fee arises, the Real Estate Commission is not the place to take it. Section 40-57-60(B) states that the commission “may not be involved in a resolution of disputes between licensees over the payment or division of a commission or fee.”¹ The commission investigates license law and ethics complaints, but a straight argument over who earned the money goes to private dispute resolution or civil court.

Many broker fee agreements include a mediation clause requiring both sides to try a neutral third party before filing suit. If mediation fails, arbitration or civil litigation is the next step. Brokers who are members of the National Association of Realtors may have to arbitrate disputes with other members through the local Realtor board under NAR’s Code of Ethics and Arbitration Manual.

1
South Carolina Legislature. South Carolina Code Title 40 Chapter 57 – Real Estate Brokers, Brokers-in-Charge, Associates, and Property Managers
2
National Association of REALTORS. National Association of REALTORS Reminds Members and Consumers of Real Estate Practice Change
3
National Credit Union Administration. Electronic Signatures in Global and National Commerce Act (E-Sign Act)