What is a protection clause in brokerage agreements?

A protection clause in brokerage agreements is a provision that allows a broker to collect fees or commissions after the listing agreement has expired, provided that the broker has introduced the buyer to the property during the term of the listing. This clause ensures that brokers are compensated for their efforts and the relationships they have built during the listing period, even if the transaction closes after that period.

This is particularly important in real estate, where a broker may have spent significant time and resources marketing a property and showing it to potential buyers. If a buyer decides to purchase the property shortly after the agreement ends but was introduced to the property by the broker while the agreement was in effect, the broker is still entitled to their commission under the protection clause.

The other options do not accurately define the purpose of a protection clause. A protection clause does not specifically protect the broker from competition, focus exclusively on the buyer's interests, or guarantee a minimum commission. Instead, its primary purpose is to ensure that the broker is fairly compensated for their work in the event that a sale occurs shortly after the listing period ends.