Real Estate Commission Demand Letter – Official Notice

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Updated August 08, 2022

Or use an attorney at ContractsCounsel to write a demand letter.


A real estate commission demand letter is a notice given by a broker to a client who has not paid a commission. This is often after a transaction has occurred on the property, such as a sale or lease, or if other terms of the contract rightfully owe the broker. Other situations where the broker may be due payment is when the earnest money from a potential buyer has been forfeited, in most listing agreements the listing broker is entitled to a portion of the deposit (up to a certain amount). If the demand letter is sent by certified mail with return receipt, it’s considered official notice and the broker may be able to use the unpaid amount and demand letter to file a lien against the property.

Table of Contents

What is a Real Estate Commission Demand?

A real estate commission demand informs the client of a payment that is past due in accordance with the broker’s listing agreement. If the payment is not made within the allotted time period mentioned in the demand, there could be repercussions, including, but not limited to, Small Claims Court filing, a lien placed against the property, or hiring an attorney with mediation or litigation proceedings. The most appropriate strategy is to file a lien since the broker provided a service that is related to the property. Under a lien, the broker will have to be paid before the owner can obtain bank financing or sell the property.

Sample – Commercial Real Estate

Mendelsohn and Associates
575 Hillcrest Street, #2
Savannah, Georgia, 31401
(912) 555-7191
bernice@mendelsohnassoc.com

April 5th, 2020

Dear Mr. Tyler Andrianakis,

I, Ms. Bernice Mendelsohn, a licensed real estate agent in the State of Georgia, am writing this demand letter as my LAST NOTICE for the commission owed on the following transaction:

     Property: 61 Richmond Drive, Savannah Georgia, 31403

     Transaction Type: ☒ Sale ☐ Lease

     Commission: 5% of $495,000 ($24,750)

If there is no response to this demand letter by May 5th, 2020, all legal rights shall be explored, including, but not limited to, legal proceedings necessary in accordance with State and Federal laws.

This notice of demand serves as official notice to you and may be tendered in court as evidence of your failure to cooperate. If legal action is to occur to resolve this matter, it may involve having you pay attorney’s fees.

We hope to resolve this matter as soon as possible.

Sincerely,
Bernice Mendelsohn

Sample – Residential Real Estate

Grand Avenue Realty
1300 Grand Ave.
Des Moines, IA, 50309
515-286-1687
jgraham@grandaverealty.com

January 12, 2020

Dear Ms. Megan Jenkins,

I, Mr. Jeffrey Graham, a licensed real estate agent in the State of Iowa, am writing this demand letter as my LAST NOTICE for the commission owed on the following transaction:

     Property: 1865 Mondamin Ave, Apartment #4, Des Moines, IA, 50313

     Transaction Type: ☐ Sale ☒ Lease

     Commission: 1 month’s rent ($1,400)

If there is no response to this demand letter by February 19, 2020, all legal rights shall be explored, including, but not limited to, legal proceedings necessary in accordance with State and Federal laws.

This notice of demand serves as official notice to you and may be tendered in court as evidence of your failure to cooperate. If legal action is to occur to resolve this matter, it may involve having you pay attorney’s fees.

We hope to resolve this matter as soon as possible.

Sincerely,
Jeffrey Graham

How to Write

Download: Adobe PDF, Microsoft Word (.docx), Open Document Text (.odt)

Step 1 – Obtain Your Real Estate Commission Demand Letter

You can issue the notice available through the “PDF,” “Word,” or “ODT” buttons captioning its preview. The comparable text links above also give you access to the named file type of the demand letter presented in the preview image. Select the version that you can edit with the current software on your machine then save it as a clean copy to an accessible folder. Open it when you are ready to supply it with material and issue it. Remember this letter must be printed after it has been completed so that it may be properly executed.

 

Step 2 – Display The Real Estate Agent Or Firm’s Contact Information

The Real Estate Agent will need to supply the return information for this letter. This is a customary feature of all business letters so a set of blank lines underneath the word “From” in the upper left corner have been supplied for this requirement. You must produce the full name of the Real Estate Firm, Real Estate Agent, street mailing address, city, state, and zip code as shown below. If the Real Estate Agent sending this letter operates independently then, you may start with his or her name.

 

Step 3 – Document The Date Of The Demand Notice

Demand Letters and Notices work with a specific timeline in mind (of the Sender and the law). Oftentimes, this period will depend upon the calendar date of the demand letter or notice in question. Therefore, you must assign the effective “Date” of this letter. Locate the pre-formatted calendar date lines attached to the “Date” label on the left of this page. Attach an effective “Date” to this notice using these lines. 

 

Step 4 – Address The Target Recipient Directly

The Recipient of this notice will be the entity that has violated the terms the Real Estate Agent expected to be followed. Usually, this will be terms that have already been set in a written agreement. Thus, locate the violated agreement then transcribe the Recipient’s name from that paperwork to the blank line after the word “Dear” to begin this letter. In the unlikelihood that no such written agreement exists, make sure you report the exact name of this letter’s Target Recipient as it appears on his or her formal identification.    

 

Step 5 – Solidify The Real Estate Agent’s Role In This Demand

The first paragraph of this letter will be a declarative one. Many would consider it imperative to this document, that the Sender (Real Estate Agent) identify himself or herself immediately while making the declaration. The blank line between the first word (“I”) and the phrase “A Licensed Real Estate Agent…” will expect the full name of the Agent issuing this demand to the Target Recipient.

 

Step 6 – Record The Location Of The Real Estate License Held By The Agent

The State where the Real Estate Agent obtained and maintains his or her license to practice real estate must be identified in the next portion of this introductory statement. Find the blank line following the language “…In The State Of” to report the name of the State being discussed.      

 

Step 7 – Deliver The Location Of The Property

Now that we have completed the declaration, we must proceed through this letter to provide some supplementary material essential to this letter’s goals. Locate the blank line attached to the bold word “Property,” then document the address of the property at the center of the violation being addressed. Keep in mind, this must be the geographical (GPS) address anyone may use to find and physically enter the property. You may not identify this property through a P.O. Box address or (if different) the mailing address of the Target Recipient.     

 

Step 8 – Define The Violation Type

The nature of the violation will depend largely on the transaction that occurred without the Real Estate Agent’s knowledge, payment, or both. Thus, mark the “Sale” checkbox after the “Transaction Type” label to indicate that a sale concerning the property has violated an agreement between the Real Estate Agent and the Target Recipient or mark the checkbox after the word “Lease” to indicate that a leasing arrangement involving the defined property occurred in violation of the concerned agreement.    

 

Step 9 – Demand Remuneration

The nature of this demand means that the Real Estate Agent was not paid an amount expected by a pre-existing agreement. The next part of this letter will seek to correct this oversight or violation by specifically naming the “Commission” of the Real Estate Agent. List the agreed-upon commission rate and the total amount of money the commission rate must be applied to when determining payment on the two blank lines after the word “Commission.” The first of these will expect the percentage defining the commission rate while the second is set to receive the dollar amount it will be applied to.    

 

Step 10 – Impose A Deadline To This Notice

The Target Recipient should be given a deadline to respond with payment, a proposal for payment, or with a definitive statement. Inform the Recipient of this deadline by displaying it on the blank lines after the statement beginning with “If There Is No Response To This Demand Letter By.” This language coupled with the deadline you impose informs the Recipient that there will be consequences if your demand is not met by the date you have provided the concerned statement.   

 

Step 11 – Prove Your Intent Through Execution

This letter will need the signature of the Real Estate Agent sending it in order to be taken as a valid demand notice. This act of execution will show proof of the serious nature of the demand being made and the Real Estate Agent’s willingness to seek more aggressive venues (i.e. the courts). The blank line placed directly below the word “Sincerely” will accommodate the Real Estate Agent’s signature for this purpose. It is strongly recommended that you make sure this letter has been filled out accurately before it is signed and sent by the Real Estate Agent.