“Let’s make a deal and cut you a check!”
RE: WELTON ENTERPRISES, INC. COMMISSION POLICY LETTER
To: Our Fellow Commercial Real Estate Brokers
Due to ongoing frequent negotiations with potential customers that have included Brokers not employed by WELTON ENTERPRISES, INC. (WEI), and the fact that our last letter formalizing our commission policy was over 12 years old, WEI deems it prudent at this time to re-stipulate the terms under which WEI or any of its managed companies, partnerships, LLC’s or other ownership entities are willing to pay a brokerage commission to cooperating firms and agents.
This policy is currently in effect and will remain in effect until, or unless, it is re-stipulated by letter, or superseded by law. It will apply to all commercial brokerage firms, their agents and employees, and all others who seek compensation from WEI for brokerage or negotiation activities (hereinafter referred to as “Brokers”). This clarification of our policy is intended to prevent any misunderstandings, provide guidance and assurance, and enhance the total business and negotiation environment between and amongst all parties. We have a long history of paying brokerage commissions to Brokers in the community and we want to continue and enhance this synergistic relationship.
The standard commission paid by Welton entities to WEI for fully executed leases is 2.5% of the monthly collected proceeds of the base rental payment, paid in arrears. WEI will be happy to pay other amounts, on different schedules, if they are negotiated upfront, in writing, prior to any lease terms being negotiated. Since a written commission agreement is normally required by state statutes we feel that this is the fairest and best policy for everyone involved in each transaction. If there has been no written agreement reached between WEI and the cooperating Brokers regarding the commission to be paid, prior to the negotiation of the lease, WEI will assume the standard commission, as set forth above, is acceptable and will apply it for each transaction. When in the judgment of the management of WEI it is necessary to incur some expense to some other third party to the transaction to facilitate the lease, and the Tenant does not share in the full costs of the expense, a portion of such amount may be deducted from the gross commission received, and the cooperating Brokers would then receive the applicable percentage of the balance. If time and circumstances permit, the cooperating Brokers will receive prior notification of such expense.
The standard commission WEI will pay for sales of real property varies with the type of property, the terms of the sale, and the policy of the other brokerage firm involved. In general WEI will pay a commission equal to one-half of the collected fee that WEI receives on the transaction. When in the judgment of the management of WEI it is necessary to incur some expense to some other third party to the transaction to facilitate the closing of the sale, such amount will be deducted from the gross commission received, and the cooperating Brokers will receive the applicable percentage of the balance. If time and circumstances permit, the cooperating Brokers will receive prior notification of such expense.
If it is necessary to take a note or other item of value as part of the commission to close the transaction, the cooperating Brokers will also own that portion of the note, and interest payable, or item taken, as their percentage of commission payable to the total commission paid.
If more than one Broker makes a claim to the selling commission and that claim has not been spelled out in a written commission agreement, or satisfactorily worked out, prior to the transaction closing; WEI will either retain the commission in their account, or the closing agent may retain the commission in an escrow account, until such time as the dispute is resolved amongst the parties. In all cases the ultimate decision about the commission to be paid out will remain with WEI, but WEI will, in all cases, adhere as closely as possible to the full requirements of the law and standards of fair and normal practices in the community.
In any case, with any commission paid, WEI will not recognize cooperating Brokers simply on the basis of a valid Wisconsin Real Estate license (although that is a bare minimum requirement), but in the opinion of WEI the Brokers must be actively engaged in the business of leasing or selling, or negotiating for the sale or lease of, commercial real estate. In addition to the requirements in the state statutes regarding licensure and the determination by WEI of the active nature of their participation, all Brokers expecting a commission must clearly demonstrate that they have been the Procuring Cause of the transaction, preferably by a written commission agreement, but we will also take into account the general consent and actions of the parties to the transaction.
Please notify all principals, agents, brokers, salespeople, and employees of this letter and its contents, and keep this letter on file. It will be our practice to remind Brokers from time to time, as the case may permit or require, of this policy, by handing out copies at the beginning of any potential transactions.
It will be the continuing policy of WEI to be as cooperative as possible with our fellow commercial Brokers and try our utmost to follow the “Golden Rule” in all of our dealings and negotiations in the marketplace. We look forward to many years of fruitful negotiations and the payment of many well-earned commissions to the Brokers in the Madison business community.
WELTON ENTERPRISES, INC.
Kurtis D. Welton
President & Treasurer