What Is a Protection Period in Real Estate?

A protection period in real estate is a specific timeframe after a listing agreement expires. It safeguards an agent’s commission if a property sells to a buyer the agent introduced during the initial listing term. It acknowledges the effort and resources an agent invests, ensuring they are compensated even if a sale finalizes shortly after their formal representation concludes. This clause is a common inclusion in listing agreements, reflecting the nature of real estate transactions where negotiations can extend beyond a contract’s initial term.

Defining the Protection Period

A real estate protection period, also known as a broker protection clause or tail provision, is a contractual arrangement within a listing agreement. Its primary function is to secure an agent’s commission if a property sells to a buyer they introduced, even after the listing agreement’s expiration.

This provision exists because real estate agents dedicate significant time, effort, and financial resources to market a property, conduct showings, and cultivate interest among potential buyers. This clause prevents sellers from waiting for the listing agreement to expire before selling to an agent-introduced buyer, thereby attempting to avoid paying commission.

This clause is not a blanket entitlement but a specific, negotiated term within the signed listing agreement. It underscores that commission is earned through the agent’s procuring cause efforts, meaning they were instrumental in bringing about the sale, regardless of when the final transaction occurs. Without such a clause, agents would face a higher risk of their efforts going unrewarded if a deal closes just after their formal listing period ends.

Key Elements of Protection Clauses

Protection clauses in real estate listing agreements feature specific components defining their applicability. The duration of the protection period dictates how long the clause remains in effect after the listing agreement expires. This timeframe is negotiable and commonly ranges from 30 to 180 days. This period allows for transactions to conclude that were initiated during the active listing term.

Another aspect involves identified buyers. Protection applies only to prospective buyers the agent introduced to the property during the listing term. The agent must provide the seller with a written list of these individuals. This list must be submitted within a specified timeframe after the listing agreement ends. The clause protects for these specific individuals, not general market activity.

All terms, including duration, identified buyers, and notice requirements, are stipulated within the original signed listing agreement. Sellers should review these provisions carefully. The agreement may also allow for an “exclusion list” where sellers pre-identify buyers with whom they had prior contact, preventing the agent from claiming commission if one of these individuals purchases the property.

Practical Application and Exceptions

A protection period triggers if a seller closes a deal with a buyer introduced by the original agent shortly after the listing agreement expires. For instance, if an agent showed the home to a buyer during the listing period, and that buyer makes an offer and purchases the property a week after the agreement ends, the original agent would generally be entitled to their commission. If a seller re-lists their home For Sale By Owner (FSBO) after the initial agreement, and a buyer who attended an open house hosted by the original agent purchases the property, the protection clause would likely apply.

However, common exceptions can void the protection period, preventing the original agent from claiming a commission. A significant exception occurs if the seller signs a new, exclusive listing agreement with a different real estate agent after the original agreement expires. In many cases, this new agreement with another licensed broker will nullify the previous protection clause. This prevents a seller from being obligated to pay two commissions on the same sale.

The protection period also generally does not apply if the buyer was introduced to the property by a different agent after the original listing expired, or if the buyer had no prior contact with the original agent during the listing term. If the seller sells the property to a party not included on the agent’s provided list of prospective buyers, the clause would not be triggered.

Instances where the original agent failed to fulfill their contractual obligations, such as inadequate marketing of the property, could also potentially void the protection clause, though proving such negligence can be complex.