PRE-OPS-2026-001-01: Tenant Renewal Split Following Unilateral Agency Extinguishment

Document ID: PRE-OPS-2026-001-01

Case Title: Tenant Renewal Split Following Unilateral Agency Extinguishment

Service Line: MPR Leasing Services

Decision Date: 20 AUG 2026

Panel Chair: Carlo Jay J. Manalo

Status: Active Binding Precedent

Governing SOP: Formal MPR Practices for Lease Renewal Closing since May 2026, Division of Duties, Responsibilities and Scope of Work

1. Dispute Summary & Disputing Parties

1. 1. First Party: [REDACTED]

   2. Second Party: [REDACTED]

   3. Disputed Engagement: [REDACTED]

   4. Financial Stake at Issue: Renewal Commission Split

2. Statement of Facts

1. 1. On Sep 14, 2025, both parties closed a lease transaction expiring on September 13, 2026.

   2. Two (2) months prior to expiration, the Second Party notified the First Party to initiate renewal procedures with the tenant per May 2026 standard SOP.

   3. The First Party performed his duties and repeatedly attempted to contact the tenant up to July 28, 2026, but the tenant remained non-responsive. The First Party formally notified the Second Party of the non-responsiveness.

   4. To protect the lessor’s interest, the Second Party contacted the tenant directly. On August 1, 2026, the tenant responded to the Second Party, expressing the intent to renew.

   5. During the call on August 2, 2026 between the Second Party and the tenant, the tenant explicitly and unilaterally terminated his agency with the First Party, citing unaddressed service concerns from August–September 2025. The tenant never communicated his dissatisfaction to any party. The tenant requested the Second Party to act as a Dual Agent.

   6. The Second Party accepted the dual agency but did not inform the First Party of the agency extinguishment until mid-August 2026.

3. Issues

1. 1. Is the First Party still entitled to a portion renewal commission? If yes, by how much? (YES, 60/40 Commission Split Applies - Section 5.1.).

   2. Does the Second Party acted in bad faith for not communicating the extinguishment of the tenant agency with its agent on record? (NO, The Second Party does not act in bad faith - Section 5.2.).

4. Procedural & Quantitative Rules Applied

1. 1. Formal Practice since May 2026: An agent maintains tenant-side representation rights unless the client explicitly extinguishes agency in writing or direct communication due to service failure.

   2. Civil Code Provisions on Agency / Quantum Meruit: An agent whose authority is revoked without fault on their part after rendering initial performance is entitled to compensation proportional to the services rendered prior to revocation.

   3. Policy Reminder: Requires immediate notification (within 24 hours) for material information (such as when an agency status changes to dual agency).

5. Operational Panel Determination & Settlement

The Operational Panel rules as follows:

1. Entitlement & Fee Split (Quantum Meruit Allocation):

   1. Total Gross Renewal Commission Collected: 100%

   2. Less: MPR OPEX Remittance (20%): Remitted off-the-top to Finance accounted to Second Party’s name only.

   3. 60/40 Commission Distributed as follows:

      1. First Party (Former Client Agent - turned - Referral Associate Designation): 40% Commission from the net amount after remittance. 

         1. This is for deal origination & initial renewal outreach credit prior to extinguishment of tenant-agency.

         2. No other duties to perform within the renewal process.

         3. No maintenance required within the renewed period.

         4. Not entitled to any succeeding renewal commission.

      2. Second Party (Listing & Surviving Dual Agency): 60% Commission from the net amount after remittance. 

         1. This is a benefit as a surviving agent in a dual agency.

         2. Performs the remaining duties within the renewal process.

         3. Maintains the lease contract within the renewed period.

         4. Sole agent entitled to any succeeding renewal commission.

   4. Rationale: The First Party did not cause the client’s non-responsiveness and actively fulfilled his duties through July 28, 2026. However, because the tenant unilaterally terminated the First Party for past performance issues, which was not brought upon at that time, and the Second Party subsequently executed the renewal agreement at the tenant's explicit request, the First Party is entitled to a 40% partial quantum meruit split rather than the full 50% client-side commission. The 30/70 split applies only when the First Party fails or refuses to fulfill his/her scope of work, such as reaching out to the tenant or confirming renewal initiatives. Here, the First Party's inability to continue performing his duties past July 28 was due to factors beyond his control, specifically, the tenant's refusal to respond.

2. Finding on Second Party Bad Faith & Administrative Directives:

   1. Bad Faith Ruling: Second Party did NOT act in bad faith regarding client sourcing, as her outreach was authorized under Fact No. 2.3 and 2.4, and the tenant's decision was voluntary, out of preference and unilateral. 

   2. Communication Breach: Second Party failed to notify First Party within 24 hours of the August 2 call. While this delay does not invalidate the tenant's decision, it constitutes an administrative communication delay. 

   3. SO ORDERED: Second Party shall transfer the 40% split to First Party upon client settlement after remittance.

6. Binding Operational Precedent Holding

"Where a tenant unilaterally terminates representation with a Client Agent due to past service dissatisfaction and transfers representation to the Listing Agent, the original Client Agent remains entitled to a 40% quantum meruit share of the client-side renewal gross commission if they actively attempted renewal outreach prior to termination of the agency. 70/30 commission split applies if the Client Agent voluntarily failed or refused to perform his/her duties and scope of work within the renewal process.

The surviving agent shall fulfill and satisfy the renewal procedures and remains in the lease maintenance. The Listing Agent assuming dual agency must notify the outgoing agent within 24 hours of the status change.

The other party shall forfeit the duties and responsibilities, as required in the SOP for Leasing Services. Furthermore, the other party forfeits any future and succeeding renewal commissions.”

7. Transcendence & SOP Revision Directive

1. 1. Impact on Core Manuals: Incorporate Sections 3, 4, and 5 into SOP-01 defining "Partial Quantum Meruit Splits upon Unilateral Client Revocation."

   2. Scheduled Codification: Q4 2027 Annual Review.