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Key Takeaways
Transparent Commissions – Agents must now clearly disclose their fees and who pays them.
No Minimums Required – MLSs can’t enforce commission minimums, allowing full negotiation.
Lower Leasing Costs – Landlords can cut expenses by negotiating or using flat-fee models.
Management Companies Help – Pros like SGI ensure compliance, savings, and efficient leasing.
In recent months, the U.S. Department of Justice (DOJ) released a landmark ruling regarding real estate commissions that has major implications for anyone involved in rental properties. For property owners, understanding this decision is essential.
The ruling focuses on how real estate agent commissions are determined and disclosed, bringing greater transparency—and potentially significant savings—to owners who lease or sell real estate.
In this guide, SGI Property Management Dallas breaks down the recent DOJ ruling on real estate commissions and what it means for landlords.
Why the Ruling Matters for Rental Property Owners
Real estate commissions historically have been negotiated between listing agents and sellers. In lease transactions, the landlord typically pays a leasing commission to the agent who brings the tenant. However, commission figures have often been vague.
This lack of transparency allows commissions to remain inflated in many markets—and landlords end up bearing the full cost.
The DOJ’s recent ruling targets these hidden practices. It clarifies that agents may no longer conceal or speak in vague terms about commissions. It also prohibits minimum commission rules enforced by MLS systems.
In practical terms, landlords may see lower commission rates, and a clearer breakdown of fees charged by listing or leasing agents. Rental property owners must adapt to newly transparent negotiations and come prepared to ask questions.
Key Points of the DOJ’s Ruling
1. No More Required Minimum Commissions
MLS platforms can no longer mandate minimum commission rates. This means agents and landlords can negotiate freely based on market conditions and property type.
Landlords now benefit from real market negotiation rather than fixed percentages.
2. Commission Transparency Is Now Required
Agents are now required to clearly disclose how much they will earn—and who pays them—before any agreement is finalized. This allows landlords to make informed decisions without hidden costs.
3. Incentives Must Be Fully Disclosed
Bonuses or commission incentives must now be explicitly included in the MLS listing. This ensures a level playing field and removes secret deals that could disadvantage property owners.
4. Open Negotiation Encouraged
With transparency in place, landlords can shop for agents who offer the best value, not just the lowest rate. This encourages fair competition among real estate professionals.
How This Impacts Leasing Costs
Previously, many landlords accepted commission rates as non-negotiable. With the new ruling, landlords have the opportunity to question and adjust these fees based on services provided and market factors.
In competitive rental markets, this could translate into substantial cost savings. Some landlords may even opt for flat-fee structures, which provide a predictable cost model regardless of the rent price.
For landlords managing multiple units, these changes can result in notable financial benefits. Lower commission rates or more efficient leasing processes can directly boost profitability.
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Landlord Tips for Navigating Commission Changes
To make the most of the DOJ’s ruling, landlords should:
Request Clear Fee Structures: Before agreeing to work with an agent, ask for a full breakdown of fees and commissions. This includes how they are calculated, who pays, and under what conditions.
Compare Agents Thoroughly: Look beyond commission rates. Evaluate the services offered, tenant screening process, marketing plans, and agent responsiveness.
Negotiate Based on Value: If an agent provides premium services, a higher fee may be justified. But with transparency, landlords are in a stronger position to ensure the fees align with results.
Use Performance-Based Incentives Wisely: If offering bonuses, make sure they are structured to reward actual performance, such as quick lease-up or tenant quality—and disclose them properly.
Why Work with a Professional Property Management Company
Navigating this new commission environment can be complex, especially for landlords who manage multiple properties or have limited time. This is where a professional property management company like SGI Property Management Dallas becomes valuable.
Property managers often offer bundled services under a flat monthly fee. This removes the guesswork from leasing commissions and ensures consistency in pricing.
Their teams handle marketing, tenant screening, lease agreements, maintenance, and compliance, allowing landlords to focus on investment growth.
Because they manage numerous properties, they often have stronger negotiating power with real estate agents and may pass these savings onto their clients.
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They also maintain updated knowledge on legal compliance, including the new DOJ guidelines. This ensures that all advertising, disclosures, and agreements are handled correctly and efficiently.
Working with a management company also helps landlords avoid conflicts or misunderstandings with agents. The company acts as the intermediary, making sure that commission structures are aligned with service levels and legal requirements.
Choosing the Right Management Partner
When selecting a property management company, prioritize those who offer:
Transparent Pricing: Look for companies with flat fees or clearly defined service-based pricing. Avoid those with hidden fees or vague commission structures.
Legal and Regulatory Expertise: Choose a company that stays current on all federal, state, and local laws, including commission disclosure requirements.
Strong Tenant Screening and Leasing Support: A reliable management team can lease your property faster and to better-qualified tenants, reducing turnover and maximizing revenue.
Communication and Reporting Tools: Look for a company that offers digital tools for tracking income, expenses, tenant communication, and maintenance requests. These platforms increase visibility and reduce stress.
Conclusion
The DOJ’s ruling on real estate commissions represents a significant win for property owners. It dismantles outdated structures that favored agents and introduces a new era of openness, competition, and choice.
For rental property owners, this is an opportunity to reduce costs, improve agent performance, and adopt smarter leasing strategies.
When in doubt, consider hiring SGI Property Management Dallas. We understand these rules and can optimize your rental operations. If you need help, contact us today!
