Commissions Can Be Recovered Even Without Contract If Compensation Expected | REAL ESTATE BROKER UPDATE

Commissions Can Be Recovered Even Without Contract If Compensation Expected | REAL ESTATE BROKER LAW UPDATE

August 16, 2018

In this week’s case, a real estate broker was retained to facilitate a lease for a franchisee of Burger King. The broker was just about to wrap it up the deal when the franchisee fired the broker. Then another franchisee of Burger King picked up the space. The broker demanded the fee but Burger King said that they used another broker. The broker sued. The court found that although there was no written contract there was an implied contract -- an agreement created by actions of the parties involved – and awarded the commission to the broker.

Generally speaking, a real estate broker is entitled to recover a commission as long as it (1) is duly licensed, (2) had a contract, express or implied, with the party to be charged with paying the commission, and (3) was the procuring cause of the transaction. But there are circumstances when a commission is still earned even though those elements have not been proved.

While the broker, in this case, was not involved in the negotiations leading up to the completion of the deal between the second Burger King franchisee, it established that it created an amicable atmosphere in which negotiations proceeded and that it generated a chain of circumstances that proximately led to the transaction

The court noted that even assuming that there was no contract, express or implied, between the parties, the broker would be entitled to recover for its services in order to avoid the unjust enrichment. The broker established that it performed services in good faith, that the parties accepted the services, and that it expected to be compensated.

Broker wins $55,810.08.

Here is the case: http://www.courts.state.ny.us/reporter/3dseries/2018/2018_05668.htm

FAQ's

Q: When is a real estate broker entitled to a commission?

A: 1. When the broker is duly licensed

2. When the broker has or had a contract, express or implied, with the party paying the commission.

3. When the broker is the procuring cause of the transactions.

Q: Can I get a commission as a broker if I do not have a written contract?

A: Yes, you can get a commission if there is an implied contract between parties.

Q: What is an implied contract?

A: An implied contract is an agreement created by the actions of the parties involved.