Evening star., 1947-08-28
Indictment Sets Out
Commission Rates for
Real Estate BROKERAGE

The grand jury indictment re-
turned yesterday in the real estate
investigation provided the following
descriptions of the Washington Real
Estate Board and the National AS
sociation of Real Estate Boards, and
present commission rates for real
estate brokerage:
The Washington board is a cor
poration organized in 1928 Gnder
District laws and is a successor to
an unincorporated association or
ganized In 1913 as "the Real Estate
Brokers Association OF Washington
City. D. c.
1T is trade association, 'the
Indictment said, with a member
ship of approximately $50 real es-
tate brokers and others affiliated
with the real estate business, in
cluding several banks. building and
loan associations, life insurance
companies and title companies, all
doing business in the District. The
Washington board and all members
thereof are members Of the national
association"
NAREB Organized In 1908.
The NAREB Is corporation
organized in 1903 under the laws OF
Illinois. It's membership comprises
about $4,000 real estate brokers and
others affiliated with the real es-
tate business throughout the United
States, including the District. IT
also includes about 800 local asso-
Citations of real estate brokers and
others affiliated with the real estate
business.
Since February Is, 1943, the
schedule of brokers' commissions on
sales of real estate in the District
have been 5 per cent on the first
$4,000 and 3 per cent on amounts
above s50,000. Prior to February Is.
lo43. according to the Indictment,
the commission rate on sales was
5 per cent on the first $4,000 and
per cent on amounts above that.
Exchange Rate 21a Per Cent.
On exchanges of real estate, the
present commission rate is 2i2 per
cent Of the exchange price of lower
valued property, with an additional
charge against the owner OF the
higher-valued property for the eX-
cess at the rate of per cent up to
and including $4,000 and 3 per
cent for the amount above $4,000
If located within the District
For several years prior to Feb
ruary is, 1912" the indictment seid,
the schedule of commissions adopt
ed by the Washington board re-
qulred its members to charge each
owner rate of commission of 21s
per cent of the exchange price of
the lower valued property. with an
additional charge against the owner
of the higher valued property for
the excess at the rate of 3 per
cent"
Lease Schedule.
The schedule of commissions of
the Washington board fixes the fol-,
lowing rates to be charged by a
member broker for getting a tenant
or negotiating lease for properties
where the broker does not collect
the rent or manage the property:
l, Monthly tenancy: One half of
first month rent.
2. Leases: One year, per cent.
3. Leases: Term, first year, 5 per
cent; next 20 years, 2la per cent;
next 21 years, l per cent; next 81
years, L of l per cent
Management Commissions.
The indictment declared:
THE schedule of commissions fixes
the rate of commissions for collec-
tion of rents and management of
commercial and residential prop
critics as follows:
The commission shall be 5 per
cent Of the gross rent, payable as
collected. for all classes of property
up to 100000 annually. This pro-
vision shall apply not only to the
original lease but to any extensions
or renewals thereof.
"On an individual building or
project where the gross annual
rental exceeds 100000 the COM
mission on the excess shall be sub
jpct to agreement. Minimum COM
missions on all rentals under $40
a month shall be 81"