If a broker cannot collect a commission from their managing broker, what action can they take?

The correct course of action for a broker who cannot collect a commission from their managing broker is to file a lawsuit against the broker. This option is significant because, in many instances, contractual obligations related to commission payments can be enforced through legal action. If a broker believes they are entitled to a commission based on their agreement with the managing broker and that agreement has not been honored, pursuing legal action allows them to seek a resolution, potentially obtaining the payment they believe they are owed. This route can lead to a court determining the validity of the commission claim and ordering the appropriate remedy.

Other actions, such as reporting the broker to the licensing agency or seeking mediation from the real estate commission, might be steps involved in resolving disputes within the industry but may not directly address the financial loss incurred due to the unpaid commission. Reporting or mediating might not lead to immediate compensation. Accepting the loss is clearly not advantageous, especially if the broker has a legitimate claim for payment. Thus, filing a lawsuit is a proactive approach to enforce contractual rights and recover potentially lost income.