Working in a profession where your income is based strictly on commission can be challenging and extra competitive at times. You work hard to put together a real estate deal, but if you don’t end up receiving the commissions owed, it can be frustrating and financially devastating. However, there are options for agents and brokers who were cut out of a deal they played a significant role in. Under Florida law, a realtor can pursue for financial relief provided they are found to be the “procuring cause” of the transaction.
The legal principle of procuring cause was born out of years of lawsuits between real estate agents. It applies to both residential and commercial transactions, and even other brokered transactions like the purchase of a yacht. In general, brokers must find or “procure a purchaser” for the sale of a property before they are entitled to a commission. Once they can produce a buyer who is ready, willing, and able to purchase the property under the specified terms, it’s known as the procuring cause doctrine.
In order to earn a commission, the broker must bring both parties together and have the sale go through as a result of continued negotiations between the buyer and seller. In order to be eligible for a commission, the doctrine requires these two conditions to be met:
- Initiate the negotiations by completing some type of affirmative action that brings the seller and buyer together, and
- The agent/broker must remain involved in ongoing negotiations between the seller and the buyer.
The second prong of the procuring doctrine test may be difficult to prove if you were purposely excluded from these negotiations. In the event this happens, you will need to show that the parties were in direct negotiations with each other without the broker who was the one who brought them together in the first place.
Understanding how and when the procuring doctrine applies can be tricky. It requires more than just letting a buyer know a specific property is still on the market. If settlement negotiations stop, but they start up again at a later date, a broker might still be eligible for a commission. However, the broker might not be entitled if he or she terminated the negotiations and then withdrew from the transaction. Sellers are not allowed to conspire with the buyer to go around the broker in order to avoid paying commission.
Retaining a Florida Commercial Litigation Attorney
Facts in your particular case will help determine what the outcome is and whether you are entitled to receive a commission. The court’s interpretation of the evidence may be hard to predict. That’s why it’s best to contact a skilled West Palm Beach commercial litigation attorney who has experience with real estate brokerage claims. If you think you are owed commission for a commercial or residential real estate transaction, you need to speak with a knowledgeable attorney as soon as possible. This may help you gain an advantage by obtaining a broker’s lien before the transaction is even finalized. Contact Pincus & Currier LLP today at 561-868-1340 to schedule a consultation.