[Commission and Compensation] North Carolina broker Chris has a buyer agency contract with Ike stating that Chris's firm will earn a 2.5% commission…

Under North Carolina law, a real estate broker owes fiduciary duties, including full disclosure, to their principal. NCREC Rule 58A .0109(c) explicitly requires a broker to provide full and timely disclosure to their principal of any bonus or other valuable consideration offered by any party. The principal must then consent to the broker receiving it. A gift card is considered "valuable consideration." To ensure the buyer's decision is not influenced by an undisclosed incentive for the agent, this disclosure must be made in a timely manner, which in this context means before the buyer develops a serious interest in the property, such as prior to showing it.

A. While the agent's compensation agreement with the buyer is not typically disclosed to the seller, this statement misses the primary legal issue of the agent's duty to their own client.

B. This is false. An agent must disclose all compensation from all sources to their principal, as this information is a material fact that could influence the principal's decisions.

C. This is false. The form of the bonus is irrelevant. Any "valuable consideration," whether cash or a non-cash item like a gift card, must be disclosed to the principal.

1. North Carolina Real Estate Commission, N.C. Admin. Code Title 21, Chapter 58A, Rule .0109(c): "A broker acting as an agent in a real estate transaction shall not receive any bonus, rebate, or other valuable consideration from any party or person for services rendered in that transaction unless the broker provides a full and timely disclosure of the payment or the promise to pay to the broker's principal and the principal consents to the broker's receipt of the bonus, rebate, or other valuable consideration."

2. North Carolina Real Estate Manual (2023-2024 Edition), Chapter 8, "Basic Agency Relationships and Duties," pp. 8-18 - 8-19: This section details the agent's fiduciary duty of disclosure, stating, "An agent has a duty to disclose to the principal all material facts that the agent knows or reasonably should know... This would include... any compensation or fees that the agent will receive from any party."

3. North Carolina Real Estate Manual (2023-2024 Edition), Chapter 11, "Brokerage Compensation," p. 11-10: This section discusses agent compensation from a party other than the principal, reinforcing that "NCREC Rule A.0109(c) requires a broker to disclose to the principal the receipt of any bonus or other compensation from a party other than the principal and to obtain the principal’s consent to receive such compensation."