Heavyweight Realtor commission fraud

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Heavyweight Realtor commission fraud

Crystal Tynan
Napa, CA · Member since 2018 · 14 posts · 2 votes

I am a real estate agent and up until last week, I was working as an 'independent contractor' doing marketing and providing real estate assistance for a top real estate agent. When I gave my resignation, as her marketing director, she actively tried to hide the fact that she was about to accept an offer on a property she had promised me a commission on. She then lied to me and said she was taking the property off the market and I was due no commission. This is approximately $11k. I have a copy of the accepted RPA and NDA she made the clients sign, to prevent them from making contact with me again. I was the agent that sent them the disclosures. I have 100+ hours into this property and she was actively procuring, and hiding, the offer I initiated as we were discussing my resignation. 

I have been working on this house as the lead agent, with no pay, for 6+ months, under the condition I would be receiving 25% of her commission. I have several emails from her stating this, she confirmed this verbally to our broker and she signed an addendum to stating same. However, my broker is saying she isn't bound by any of that and I should just let it go. 

This is in addition to $500 she refused to pay me per a verbal agreement on another deal, and $26k she kept from me after she took back a client she referred to me after I got them to submit an offer on a property they ultimately purchased. 

I think my broker is wrong and her emails should be binding. Please advise. 

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Cody L.
Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes
7y
Originally posted by @Crystal Tynan:

The excerpt I listed above specifically stated that emails can be considered a contract.

I’m also not referring to the purchase of real property. I am referring to an offer of employment, or terms of employment. These terms were offered, accepted, and executed. Then, knowing I was going to quit doing her marketing, the top agent intentiinally hid the remaining 2 deals from me to avoid paying me. 

“Generally, the elements of any legally binding contractual agreement include California Civil Jury Instructions (CACI) 302: Contract Formation—Essential Factual Elements offer, (2) acceptance, (3) consideration, and (4) no defenses. In California, the essential factual elements necessary to prove contract formation are: (1) the contract terms were clear enough so the parties could understand what each was required to do; (2) the parties agreed to give each other something of value [a promise to do something or not to do something may have value]; and (3) the parties agreed to the terms of the contract.1”

A recent case in the Court of Appeals of Texas decided March 30, 2017 (Khoury V. Tomlinson) held that “even a name or email address in a “from” field can be construed to be “executed or adopted by a person with the intent to sign the record and functions as a signature.”

The court’s reasoning was that even though the name and email address are automatically inserted into an email, nevertheless since the sender set up the email account in a manner so as to insert these items, they are considered as intentionally being inserted by the sender as a signature. The same would apply to a signature block in an email.”

But you’re right. I likely have no idea what I’m talking about. 

 I’m in your side. I think your in the right and I agree with your arguments re email agreements. 

I think the older the person your dealing with, the more likely to think it needs to be printed on a piece of tree, and signed with a quill. 

I had a 5.6m deal that needed to be extended. Agent was freaking out that we had to sign this form. I sent an email to the seller and said “you cool to extend 10 days?” He said “yes”. I said “me too”. Done. 

The issue is SHOULD you sue or push it? A wise man told me “I’d rather be rich than right”. She’s a scumbag. She should be dead to you. Don’t think about her anymore. Getting into a legal battle, even if you win, will do you more harm than good in the long run.  You don’t want to have a rep as a pushover. But you don’t want to have a rep as a litigious person either. especially if you’re staying in this field. 

That rat that’s screwing you will  get what’s coming to them. They always do. 

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  • Mary M.
    Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes
    7y

    I hate to say this, but talk to an atty and learn your rights. If funds Re short, You can call the local bar association and see if they have a service where you can talk to an appropriate atty for x min for a reduced rate. 

    0Reply
  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    7y
    Originally posted by @Crystal Tynan:

    I am a real estate agent and up until last week, I was working as an 'independent contractor' doing marketing and providing real estate assistance for a top real estate agent. When I gave my resignation, as her marketing director, she actively tried to hide the fact that she was about to accept an offer on a property she had promised me a commission on. She then lied to me and said she was taking the property off the market and I was due no commission. This is approximately $11k. I have a copy of the accepted RPA and NDA she made the clients sign, to prevent them from making contact with me again. I was the agent that sent them the disclosures. I have 100+ hours into this property and she was actively procuring, and hiding, the offer I initiated as we were discussing my resignation. 

    I have been working on this house as the lead agent, with no pay, for 6+ months, under the condition I would be receiving 25% of her commission. I have several emails from her stating this, she confirmed this verbally to our broker and she signed an addendum to stating same. However, my broker is saying she isn't bound by any of that and I should just let it go. 

    This is in addition to $500 she refused to pay me per a verbal agreement on another deal, and $26k she kept from me after she took back a client she referred to me after I got them to submit an offer on a property they ultimately purchased. 

    I think my broker is wrong and her emails should be binding. Please advise. 

     How does the Broker normally pay out commissions to you all? Does he write one check to the team lead agent & another to you? Or does the Broker write the checks to the agent who then writes checks to you as her employee? If the Brokerage only pays the team lead the Broker is correct that all of the stuff that happens down the line has got nothing to do with him/her & it's on you to figure that out with your former boss &/or an attorney.

    0Reply
  • Christopher Phillips
    Real Estate Agent · Garden City, NY · Member since 2016 · 3k+ posts · 1k+ votes
    7y

    @Crystal Tynan

    You would need to take it up with the lead broker. If the agent you worked under is the lead broker, then take it up with the local board of Realtors.

    It's very common to hear about these issues with people switching companies/brokers. Small shops tend to try to do sneaky things to hold onto commissions. Either they will not tell you about transactions that closed or they'll try to milk your numbers with "training" and other nonsense expenses.

    It's usually advised to clear out all your deals before switching companies or leaving the business to avoid these shady activities.

    0Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    7y

    When you leave a team or a brokerage, the business that is in the middle of a transaction stays with that team and or brokerage unless you have something in your independent contractor agreement which states ither wise.

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  • Crystal Tynan
    OP
    Napa, CA · Member since 2018 · 14 posts · 2 votes
    7y

    I have not left the brokerage. I just don't want to do her marketing anymore. I am still a licensed agent with the brokerage. 

    The lead agent creates a commission demand telling the broker how to pay out commissions. Then the brokerage cuts a check to each agent individually. 

    0Reply
  • Crystal Tynan
    OP
    Napa, CA · Member since 2018 · 14 posts · 2 votes
    7y

    Does it matter that the transaction was initiated while I was still a member of her team? 

    I have several emails from her stating she was paying me 25% of her commission on these deals. There was never any kind of alternative agreement stating only if I remained on her team throughout the term of the transaction, etc. 

    She refused to sign an independent contractor agreement with me, she refused to sign any kind of agreement with me, despite asking me repeatedly to type them up. 

    Each time she found a problem with them and sent me back to the drawing board. 

    0Reply
  • Christopher Phillips
    Real Estate Agent · Garden City, NY · Member since 2016 · 3k+ posts · 1k+ votes
    7y

    @Crystal Tynan

    You'll need to take it up with the lead broker. Teams have these issues frequently as members switch teams or decide to go solo. Ultimately, the commission belongs to the office. The office will have to get involved.

    2Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y

    the Broker owns the commission up until the time they pay out the agents.. as everyone above has mentioned that's first steps  the RE board or commission does not get involved with commission squabbles.. 

    @Russell Brazil  Agreed in most lead agent team set ups there is a clear written understanding of when a team member leaves.

    its just like when an agent leaves a brokerage to go to another.  The commissions stay with the brokerage.. Although in practice its a small industry and brokers who keep agents commishs' when they move that's bad form and can find it hard to recruit 

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  • Crystal Tynan
    OP
    Napa, CA · Member since 2018 · 14 posts · 2 votes
    7y

    I took it up with the lead broker. He said that although I had several emails from her stating she would pay me, and a signed agreement of sorts, that if she chose not to pay me ultimately it was at her discretion and basically, it was a learning opportunity for me. 

    He said I have a very bright future at the brokerage and to just let it go, as she is a top agent and having a friendly relationship with her is valuable to my career.

    It is now amounting to approx. $73k that she is stealing from me, a junior agent, just starting out, through commissions she is keeping despite promising me, in front of our broker.

    How is an email from her, promising to pay me, not a binding agreement? 

    Surely this is not legal. 

    0Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    7y
    Originally posted by @Crystal Tynan:

    I took it up with the lead broker. He said that although I had several emails from her stating she would pay me, and a signed agreement of sorts, that if she chose not to pay me ultimately it was at her discretion and basically, it was a learning opportunity for me. 

    He said I have a very bright future at the brokerage and to just let it go, as she is a top agent and having a friendly relationship with her is valuable to my career.

    It is now amounting to approx. $73k that she is stealing from me, a junior agent, just starting out, through commissions she is keeping despite promising me, in front of our broker.

    How is an email from her, promising to pay me, not a binding agreement? 

    Surely this is not legal. 

     Because in the american legal system emails do not constitute legally binding agreements.

    You are an agent, so you should have some concept of contract law. Paper/pdf and legally binding signatures. Emails hold zero weight what so ever.

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  • Crystal Tynan
    OP
    Napa, CA · Member since 2018 · 14 posts · 2 votes
    7y

    Except that...”Both the federal Electronic Signatures in Global and National Commerce Act, which applies to all interstate and foreign transactions, and the Uniform Electronic Transactions Act (“UETA”), a version of which California[1] and the majority of states have adopted, provide that a contract and signature won’t be denied legal effect solely because they’re in electronic form. Under these laws, the sender’s printed name at the end of an email, in the email’s signature block or even in the “From” line, can be a sufficient electronic signature to bind the sender to a contract formed by that email exchange.

    Courts across the country are increasingly enforcing contracts formed by exchanges of emails that appear informal and are unsigned in the traditional sense. One recent New York decision found that “given the now widespread use of email as a form of written communication in both personal and business affairs, it would be unreasonable to conclude that email messages are incapable of conforming to the criteria of (the New York version of the UETA) simply because they cannot be physically signed in a traditional fashion”[2]

    UETA applies “only to transactions between parties, each of which has agreed to conduct transactions by electronic means. Whether the parties agree to conduct a transaction by electronic means is determined from the context and surrounding circumstances, including the parties’ conduct.”

    0Reply
  • Crystal Tynan
    OP
    Napa, CA · Member since 2018 · 14 posts · 2 votes
    7y

    Given that she fulfilled paying me 25% on the other 2 transactions (our of 4) it would seem she intended to pay me and there was a contract by precedent. The precedent was set by the fact that she followed through and paid me on 2, but not all 4 deals, once she knew I was no longer interested in doing her marketing. 

    0Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    7y
    Originally posted by @Crystal Tynan:

    Except that...”Both the federal Electronic Signatures in Global and National Commerce Act, which applies to all interstate and foreign transactions, and the Uniform Electronic Transactions Act (“UETA”), a version of which California[1] and the majority of states have adopted, provide that a contract and signature won’t be denied legal effect solely because they’re in electronic form. Under these laws, the sender’s printed name at the end of an email, in the email’s signature block or even in the “From” line, can be a sufficient electronic signature to bind the sender to a contract formed by that email exchange.

    Courts across the country are increasingly enforcing contracts formed by exchanges of emails that appear informal and are unsigned in the traditional sense. One recent New York decision found that “given the now widespread use of email as a form of written communication in both personal and business affairs, it would be unreasonable to conclude that email messages are incapable of conforming to the criteria of (the New York version of the UETA) simply because they cannot be physically signed in a traditional fashion”[2]

    UETA applies “only to transactions between parties, each of which has agreed to conduct transactions by electronic means. Whether the parties agree to conduct a transaction by electronic means is determined from the context and surrounding circumstances, including the parties’ conduct.”

     You have a complete lack of understanding of what an electronic signature is, which is scary since you are a licensed agent. Docusign, authentisign....those are forms of electronic signatures. Emails are not. 

    Bring it to the administrative judge, they will shoot it down in 10 seconds. 

    Ive been in front of an administrative judge dozens of times, some of them for this same issue. Every administrative court heres this arguement almost every day, and it doesnt go anywhere.  Finding obscure judgments from a state you dont live in, which has likely been nullified 10 times over on appeal because some lower court judge wanted to make some noise, wont help you in court.

    Courts are open, go sit in administrative court forna day, I guarantee this issue will come up, and the judge will decide in 10 seconds that emails do not consitute a comtract.

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  • Mary M.
    Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes
    7y

    For 73k i would be lawering up. A 30 minute call with one wont break the bank 

    1Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    7y

    If you are both realtor board members, you can request mediation by the board. 

    But lacking an independent contractor agreement of how you get paid, they likely won't find in your favor.

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  • Crystal Tynan
    OP
    Napa, CA · Member since 2018 · 14 posts · 2 votes
    7y

    The excerpt I listed above specifically stated that emails can be considered a contract.

    I’m also not referring to the purchase of real property. I am referring to an offer of employment, or terms of employment. These terms were offered, accepted, and executed. Then, knowing I was going to quit doing her marketing, the top agent intentiinally hid the remaining 2 deals from me to avoid paying me. 

    “Generally, the elements of any legally binding contractual agreement include California Civil Jury Instructions (CACI) 302: Contract Formation—Essential Factual Elements offer, (2) acceptance, (3) consideration, and (4) no defenses. In California, the essential factual elements necessary to prove contract formation are: (1) the contract terms were clear enough so the parties could understand what each was required to do; (2) the parties agreed to give each other something of value [a promise to do something or not to do something may have value]; and (3) the parties agreed to the terms of the contract.1”

    A recent case in the Court of Appeals of Texas decided March 30, 2017 (Khoury V. Tomlinson) held that “even a name or email address in a “from” field can be construed to be “executed or adopted by a person with the intent to sign the record and functions as a signature.”

    The court’s reasoning was that even though the name and email address are automatically inserted into an email, nevertheless since the sender set up the email account in a manner so as to insert these items, they are considered as intentionally being inserted by the sender as a signature. The same would apply to a signature block in an email.”

    But you’re right. I likely have no idea what I’m talking about. 

    0Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    7y

    Ill be curious to see how Texas case law (which has differerent district courts in Texas having opposite opinions) holds up in a California court.

    The problem with the internet, is there are always websites that tell you what you want to hear. 

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  • Cody L.
    Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes
    7y
    Originally posted by @Crystal Tynan:

    The excerpt I listed above specifically stated that emails can be considered a contract.

    I’m also not referring to the purchase of real property. I am referring to an offer of employment, or terms of employment. These terms were offered, accepted, and executed. Then, knowing I was going to quit doing her marketing, the top agent intentiinally hid the remaining 2 deals from me to avoid paying me. 

    “Generally, the elements of any legally binding contractual agreement include California Civil Jury Instructions (CACI) 302: Contract Formation—Essential Factual Elements offer, (2) acceptance, (3) consideration, and (4) no defenses. In California, the essential factual elements necessary to prove contract formation are: (1) the contract terms were clear enough so the parties could understand what each was required to do; (2) the parties agreed to give each other something of value [a promise to do something or not to do something may have value]; and (3) the parties agreed to the terms of the contract.1”

    A recent case in the Court of Appeals of Texas decided March 30, 2017 (Khoury V. Tomlinson) held that “even a name or email address in a “from” field can be construed to be “executed or adopted by a person with the intent to sign the record and functions as a signature.”

    The court’s reasoning was that even though the name and email address are automatically inserted into an email, nevertheless since the sender set up the email account in a manner so as to insert these items, they are considered as intentionally being inserted by the sender as a signature. The same would apply to a signature block in an email.”

    But you’re right. I likely have no idea what I’m talking about. 

     I’m in your side. I think your in the right and I agree with your arguments re email agreements. 

    I think the older the person your dealing with, the more likely to think it needs to be printed on a piece of tree, and signed with a quill. 

    I had a 5.6m deal that needed to be extended. Agent was freaking out that we had to sign this form. I sent an email to the seller and said “you cool to extend 10 days?” He said “yes”. I said “me too”. Done. 

    The issue is SHOULD you sue or push it? A wise man told me “I’d rather be rich than right”. She’s a scumbag. She should be dead to you. Don’t think about her anymore. Getting into a legal battle, even if you win, will do you more harm than good in the long run.  You don’t want to have a rep as a pushover. But you don’t want to have a rep as a litigious person either. especially if you’re staying in this field. 

    That rat that’s screwing you will  get what’s coming to them. They always do. 

    4Reply
  • Aaron Taylor
    Olathe, KS · Member since 2018 · 148 posts · 207 votes
    7y

    I used to believe that, but the older I get the more I think it just never plays out.  There are always too many people above them not paying attention to what is really going on for those people to ever face the music.  It's hard for me to even think of a single case where someone really got what they deserved, most of the time they just moved to a new group to pull the wool over their eyes with no ramifications at all.  

    I'm mainly referring to a situation where someone in a position of power is taking advantage of people who hold the weaker position, the people in the weaker position usually have no way to come out on top while the person in the stronger position continues with no penalty for their behavior. 

    2Reply
  • Charlie MacPherson
    China, ME · Member since 2014 · 3k+ posts · 4k+ votes
    7y

    @Crystal Tynan @Russell Brazil  For what it's worth, Massachusetts courts have held that contracts can be formed by email and text.

    That's why my email signature includes "- Emails sent or received shall not create a binding contract in absence of a fully signed written contract."

    If there's really $73K on the line, I'd find a good litigating attorney.  Find someone who focuses on contract and/or employment law, not a real estate attorney.

    Recognize that the managing broker has the top agent's back.  She is putting a lot of money in his pocket, which is likely his primary motivation.  He's not going to do anything to tick her off.

    Also, don't be surprised if he terminates you.  While you still can, gather every scrap of documentation that you'll need should this go to trial.

    Good luck!

    2Reply
  • Aaron Poling
    Realtor · WV · Member since 2018 · 454 posts · 310 votes
    7y

    Hopefully you have a written independent contractor agreement with her. Typically brokers will stay out of commission disputes between agents as it really doesn't fall under their authority when agents make agreements with each other. I would let the agent know that you expect to get paid, and if you don't you will take action against her. If she doesn't pay consult with an attorney, real estate commission, labor board, etc... It will probably be more of a hassle for the agent to not pay then to have to deal with fighting you. If you do have a written agreement that shows in your favor you will most likely win. 

    Good Luck! Aaron

    2Reply
  • Crystal Tynan
    OP
    Napa, CA · Member since 2018 · 14 posts · 2 votes
    7y

    Thank you very much for your input everyone. 

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Crystal Tynan:

    Thank you very much for your input everyone. 

     just don't quit until you get your money..  once you get your money move on.

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  • Cody L.
    Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes
    7y
    Originally posted by @Aaron Taylor:

    I used to believe that, but the older I get the more I think it just never plays out.  There are always too many people above them not paying attention to what is really going on for those people to ever face the music.  It's hard for me to even think of a single case where someone really got what they deserved, most of the time they just moved to a new group to pull the wool over their eyes with no ramifications at all.  

    I'm mainly referring to a situation where someone in a position of power is taking advantage of people who hold the weaker position, the people in the weaker position usually have no way to come out on top while the person in the stronger position continues with no penalty for their behavior. 

    I hear ya. It’s not always obvious but I believe that more often than not, people who screw over people, and get a rep for doing so, do worse over the long run vs people who get a rep for standing by their word.  

    It’s hard to let things go when someone is F’ing you over but I still think it’s the better option. 

    1Reply
  • Ronald RohdePro Member
    Attorney · Dallas, TX · Member since 2016 · 5k+ posts · 2k+ votes
    7y
    Originally posted by @Russell Brazil:
    Originally posted by @Crystal Tynan:

    I took it up with the lead broker. He said that although I had several emails from her stating she would pay me, and a signed agreement of sorts, that if she chose not to pay me ultimately it was at her discretion and basically, it was a learning opportunity for me. 

    He said I have a very bright future at the brokerage and to just let it go, as she is a top agent and having a friendly relationship with her is valuable to my career.

    It is now amounting to approx. $73k that she is stealing from me, a junior agent, just starting out, through commissions she is keeping despite promising me, in front of our broker.

    How is an email from her, promising to pay me, not a binding agreement? 

    Surely this is not legal. 

     Because in the american legal system emails do not constitute legally binding agreements.

    You are an agent, so you should have some concept of contract law. Paper/pdf and legally binding signatures. Emails hold zero weight what so ever.

     Emails can be binding written agreements, it's not accurate to state such a blanket statement. 

    2Reply
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