What is the penalty if a brokerage agreement has no specified termination date?

When a brokerage agreement does not specify a termination date, it is generally interpreted under Virginia law that the agreement has a default duration of 90 days. This is a legal provision designed to provide a clear understanding of the parties' obligations, preventing potential disputes that could arise from an indefinite relationship.

The intent of this regulation is to encourage clarity in agreements while also providing a reasonable timeframe for parties to evaluate their ongoing relationship. By establishing a 90-day default term, the law aims to protect both the agent and the client, ensuring that neither party is locked into an endless relationship without the opportunity for review or renegotiation.

Understanding this provision is essential for real estate professionals in Virginia, as it influences how they manage their client relationships and contractual obligations. Having a default termination period allows both parties the option to either continue the relationship with new terms or formally conclude it after the specified period if desired.