Broker Commission Disputes
Real estate transactions often involve valuable property rights, nuanced legal paperwork, and large sums of money changing hands. Broker Commission disputes can occur in a multitude of ways. Commonly, agents representing a transaction agree to split the commission on the listing. However, when these deals are agreed upon orally or even when they are recorded in writing, conflicts can transpire. In such cases, it is vital to have a strong legal advocate to resolve these disputes.
In order to succeed on a broker commission dispute, a broker must demonstrate that he or she is the procuring agent in the transaction. The procuring agent is defined as the agent who ultimately leads the buyer to purchase the property (i.e. he/she who is entitled to the commission). While this may seem straightforward, a number of different factors and actions may lead to the final purchase of property, including open house showings, price negotiations, etc., presenting the issue of who played the biggest role in the purchase of the property.
Disputes also arise if a deal closes after the term of the commission agreement. Real estate brokerage contracts often include “tail” provisions in order to cover the rights of both parties following the conclusion of the contract. This provision may maintain the broker’s right to a commission in the case of any transaction taking place after the end of the contract (with any of the leads he or she has generated). If one of said leads results in a sale after the contract has ended, the broker may be entitled to a commission. This type of provision is commonly disputed, emphasizing the importance of an experienced real estate attorney in your corner.
Buyers are advised to contact only their own agents to see a property and not share information with other agents. If agents decide to collaborate on a deal or arrangement, they should clearly outline the transaction into writing. Furthermore, state and local associations offer mediation and arbitration services as possible alternatives to litigating commission disputes, contingent on all parties agreeing to submit to dispute resolution voluntarily. If the agents cannot reach a final agreement over the allocation of commission, and alternative dispute resolution is not a viable option, a local civil court may maintain the final jurisdiction over the dispute.
Litigating said dispute often requires the use of top-tier legal representation. Held and Hines is determined to utilize our experience in real estate litigation and passion for justice to protect the interests of our clients, including real estate brokers. No matter the nature of your dispute, we will be there to help. A thorough understanding of real estate property and broker commission law is crucial to success in these types of cases.
Held and Hines has a proven track record of success in commission dispute litigation. If your real estate brokerage commission dispute involves:
- A dispute over a real estate brokerage contract
- A seller who won’t pay the agreed-upon commission
- A broker or real estate agent from another firm
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