The Real Estate Brokerage Contract Management Process

The real estate brokerage contract is established to ensure transactions occur transparently, efficiently, and in compliance with the law. This management goes beyond mere signing; it encompasses the entire process of tracking, executing, and liquidating the contract. Below is a detailed guide on the real estate brokerage contract management process executed by the expert team at Long Phan Consulting Company.

The concept of the real estate brokerage contract

Under Clause 11, Article 3 of the 2023 Law on Real Estate Business, real estate brokerage is acting as an intermediary for parties in buying, selling, transferring, leasing, subleasing, or lease-purchasing real estate.

The real estate brokerage contract is a written agreement between the broker and the brokered party. The broker searches for partners so the parties can sign a real estate contract, while the brokered party is obligated to pay service fees as agreed. This is a type of service contract that generates civil rights and obligations between the subjects.

This document, specifically the real estate brokerage contract, records commitments regarding information provision, negotiation support, and transaction promotion. Its validity depends on civil behavioral capacity and the voluntariness of the parties. The agreed content must not violate legal prohibitions or social ethics.

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Mandatory contents of a real estate brokerage service contract

Currently, under Clause 2, Article 3 of the 2023 Law on Real Estate Business, real estate service business includes: real estate trading floors, real estate brokerage, real estate consulting, and real estate management, such as the real estate brokerage contract.

Pursuant to Clause 4, Article 46 of the 2023 Law on Real Estate Business, real estate service contracts must include the following core information groups:

• Names and addresses of the parties.
• Service object and content.
• Service requirements and expected results.
• Service execution timeframe.
• Service fees, remuneration, and commissions. This must include:

      + The specific fee/commission rate.

      + The calculation method (percentage of transaction value or fixed amount).

      + Fee adjustment conditions (if any).

Clear financial agreements prevent disputes and protect the interests of participating parties.

• Payment methods and deadlines.
• Rights and obligations of the parties. 

This section must clearly state obligations, especially those of the broker, helping them understand their responsibilities while protecting the brokered party’s rights.

• Dispute resolution methods.
• The contract’s effective date.

Key points to note in a real estate brokerage service contract

Building a contract management process requires strict compliance with legal regulations to prevent future damages when executing the real estate brokerage contract. Clients must pay special attention to:

First, real estate brokerage service contracts must be established in writing under Clause 9, Article 3 of the 2023 Law on Real Estate Business. Notarization/authentication is mutually agreed upon.

Second, the effective date is agreed upon and specifically recorded. In special cases where the contract lacks an effective date clause, Clause 6, Article 44 applies:

• The contract takes effect when the last party signs it or expresses acceptance on the contract.
• If notarized/authenticated, it takes effect when the notarization/authentication document takes effect.

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Principles of managing real estate brokerage contracts

Managing real estate brokerage contracts requires a combination of legal knowledge and practical operational skills. A system for managing the real estate brokerage contract must ensure consistency from the drafting stage through to the archiving stage.

Principle of compliance with current laws

Management of the real estate brokerage contract must strictly adhere to the 2023 Law on Real Estate Business and the 2015 Civil Code. Enterprises must have business registration, and individual brokers must possess practicing certificates (Article 61, 2023 Law on Real Estate Business). Unfair competition or deceiving clients is strictly prohibited.

The principle of transparency and clarity in the terms and conditions

Clauses in the real estate brokerage contract must be drafted transparently to avoid any misunderstandings. The language must be accurate, unambiguous, and easy to understand. Numbers regarding commission rates or asset values must be written in both numbers and words to prevent misinterpretation.

Principles of customer information security

Protecting client data and financial information is mandatory in the real estate brokerage contract. Disclosure of information to third parties is only allowed with the owner’s explicit consent (Article 11, Decree 13/2023/ND-CP).

Principle of ensuring the rights and interests of all parties

Management of the real estate brokerage contract must ensure a fair balance of interests between the parties. Neither party may impose disadvantageous clauses or deprive the other of lawful rights. A complaint-handling mechanism must be established.

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Real estate brokerage contract management process

Deploying this process for the real estate brokerage contract requires seamless coordination between the sales and legal departments, starting from receiving information to liquidating obligations under the 2023 Law on Real Estate Business.

Receiving and identifying the need for contract signing

The initial step is receiving and defining the client’s needs to build suitable contract content. The broker meets the client to understand their desires (buying, selling, leasing), verifies the owner’s identity, and records specific requirements regarding price, location, and timeframe for the real estate brokerage contract.

Drafting a real estate brokerage contract

Based on confirmed needs, the legal department drafts the contract using the unit’s standard template. In the real estate brokerage contract management process, contract drafting must ensure that the content is complete, accurate, and compliant with legal regulations.

The document must fully reflect the agreed-upon terms regarding remuneration and work schedule. The drafting process ensures accurate legal language and maximum protection of your rights. Real estate service contracts must include all information as stipulated in Clause 4, Article 46 of the 2023 Law on Real Estate Business.

Verify the legality before signing

A crucial step in managing the real estate brokerage contract is checking their legal validity to ensure the contract is sound and to mitigate risks. This involves verifying the validity of documents proving ownership or land use rights and ensuring they meet the conditions stipulated in Article 14 of the 2023 Real Estate Business Law, including:

• Possess a Certificate of Ownership of Housing and Land Use Rights or a Certificate of Land Use Rights, Ownership of Housing and Other Assets Attached to Land or other certificates on land use rights and ownership of assets attached to land as prescribed by land law;
• Not applicable to cases involving ongoing disputes over land use rights associated with housing or construction works, or disputes over ownership of housing or construction works put into business that are being notified, processed, and resolved by competent authorities; or, in the case of disputes, which have been resolved by competent authorities through judgments, decisions, or rulings that have become legally effective;
• Not subject to seizure to secure enforcement of judgment;
• Not subject to any legal prohibitions on transactions;
• Not subject to suspension or temporary suspension of transactions as stipulated by law;
• The information has been made public.

This stage eliminates the risk of contract invalidation due to formal or substantive errors.

Organization that signs brokerage contracts

Managing the real estate brokerage contract involves organizing the signing of contracts professionally, ensuring compliance with legal procedures and formalities. Parties can meet in person or use legally valid electronic methods to establish the transaction. The legal representative of the business must sign and stamp the document. Clients receive an original copy with equivalent legal validity for verification.

Storing and managing contract records

Managing the real estate brokerage contract requires a systematic record-keeping system for easy retrieval and processing when needed. Contracts are assigned unique identification numbers and stored in the company’s document management system. The records include the original contract, copies of property legal documents, and client information. Storage is done in a secure location to prevent loss or damage due to environmental factors.

Contract monitoring and execution

In the process of managing the real estate brokerage contract , monitoring progress helps ensure that commitments are fully and promptly fulfilled. The sales department implements activities to find potential clients according to the committed plan. Progress reports are sent periodically so that clients can stay informed of the actual status of the transaction. Any changes during the execution process must be documented as a written addendum to the contract.

Handling issues that arise during implementation

Managing the real estate brokerage contract requires flexibility in handling unforeseen issues to maintain the stability and efficiency of transactions. When unforeseen problems arise, the parties should rely on the dispute resolution clause to resolve them. Situations such as clients changing their minds or market price fluctuations require timely negotiation. Meeting minutes serve as crucial evidence to clarify the responsibilities of each participating party.

Termination of brokerage contract

After the transaction objectives are met or the deadline expires, the parties proceed to sign a liquidation agreement for the real estate brokerage contract. This is the point at which service fees are settled and the brokerage firm is released from its obligations, in accordance with Article 63 of the 2023 Law on Real Estate Business. Liquidation helps to terminate the legal relationship clearly and in accordance with regulations.

The shift from traditional management to digital solutions is an inevitable trend today. Support from modern tools enhances the productivity of real estate brokerage contract management processes.

Application of technology in brokerage contract management

The transition to digital solutions is an inevitable trend in managing the real estate brokerage contract, as it enhances operational efficiency and increases transparency throughout the entire process.

Use contract management software

Businesses implement ERP systems or specialized software to manage records related to the real estate brokerage contract. This tool allows for quick information retrieval and minimizes errors caused by manual operations. Centralized data provides managers with a comprehensive overview of business operations.

Electronic data storage and record digitization

Digitizing documents related to the real estate brokerage contract helps optimize physical storage space while improving information security. High-quality scans are stored on a cloud platform with strict access control mechanisms. This ensures that records are always readily available for legal review and verification.

Track progress and set automatic reminders

The system automatically sends notifications to clients when payments are due or when report updates are needed for the real estate brokerage contract. This feature helps brokerage staff avoid missing important contract tasks. Automated progress management enhances the professionalism and credibility of the brokerage firm.

Contract information security

Data encryption technologies are used to protect sensitive information related to the real estate brokerage contract from unauthorized external access. A system that tracks edit history helps monitor any changes to the content of electronic contracts. Technological security is an effective barrier against the risk of customer data leaks.

Long Phan Consulting Company provides consulting services on real estate brokerage contract management processes

Experts at Long Phan Consulting Company provide comprehensive legal solutions to optimize contract management. We structure our professional support into the following key area:

• Develop a standardized system of real estate brokerage contract templates in accordance with the 2023 Real Estate Business Law.
• Assess the legal capacity of the counterparty and the legal status of the assets involved in the brokerage transaction.
• We advise on commission and service fee structures to ensure economic benefits for our valued clients.
• Representing clients in negotiating complex or contentious terms in brokerage contracts.
• Review and improve the system for storing records and documents to meet the inspection requirements of state agencies.
• Guidelines for applying digital signatures and electronic contracts to brokerage activities to speed up transactions.

Frequently Asked Questions about the Real Estate Brokerage Contract Management Process

Below are common inquiries regarding the real estate brokerage contract management process:

Are verbal or text message-based real estate brokerage contracts legally valid?

No, according to Clause 9, Article 3 and Clause 1, Article 44 of the 2023 Law on Real Estate Business, contracts for real estate services (including brokerage) must be in writing. Oral agreements or text messages do not meet the formal requirements and will result in the contract being invalid, not giving rise to any legally protected rights and obligations.

Is it mandatory for a brokerage contract to be notarized or authenticated in order to be valid?

According to Clause 4, Article 44 of the 2023 Law on Real Estate Business, it is not mandatory for real estate service contracts (including brokerage) to be in writing. However, notarization or certification is at the discretion of the parties, except in cases where other specialized laws mandate it. Nevertheless, notarization is encouraged to enhance legal validity and evidentiary value.

When is a real estate brokerage service contract considered complete?

According to Point c, Clause 4, Article 46 of the 2023 Law on Real Estate Business, a contract is considered completed when the service content has been fully performed or in other termination cases agreed upon by both parties in the “Service Requirements and Results” section.

What are the educational requirements for individuals to be eligible to take the real estate brokerage certification exam?

According to Clause 1, Article 70 of the 2023 Law on Real Estate Business, individuals wishing to take the examination for a real estate brokerage license must have a high school diploma or equivalent. This is a mandatory requirement aimed at improving the quality of human resources in the real estate service business and eliminating the situation of brokers lacking basic educational qualifications.

Are individuals practicing as independent (freelance) real estate brokers subject to administrative penalties for violations?

Yes. According to Clause 1, Article 8 and Clause 2, Article 61 of the 2023 Law on Real Estate Business, the act of independently conducting real estate brokerage services without establishing a business or belonging to a real estate service organization is prohibited. Individuals who violate this will be subject to administrative penalties, forced to cease the violation, and comply with regulations on the form of professional organization.

What should you do if you discover that your real estate agent has provided false information about the property?

Customers should immediately gather evidence (text messages, emails, audio recordings, promotional materials), then send a formal written notice to the brokerage firm requesting an explanation and remediation. If the issue is not resolved satisfactorily, customers have the right to file a lawsuit in the competent court to claim compensation for damages as stipulated in Article 65 of the 2023 Law on Real Estate Business.

Conclusion

Establishing a tight real estate brokerage contract management process is the foundation for an enterprise’s sustainable development. Complying with the law protects the assets and reputation of all parties in a competitive environment. Please contact Long Phan Consulting Company immediately via Hotline  1900636389  for direct support from our professional expert team.

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