NDA Issue/Investor Is Violating NDA TERMS

6 Replies

Good morning, I'm curious about an issue that I'm having. I have been bird dogging for an investors for sometime now, and I have sent them multiple deals. None of the deals has ever closed before. I finally found a property that the investor is scheduled to close. The only problem is, they are not wanting to pay me the agreed upon full amount per the NDA. They are wanting to give me a fee, rather than a percentage. The NDA clearly states that upon closing on the property, a percentage of the purchase amount would go to me for the finders fee. Is there any way that I can get my full payment, that was agreed upon within the NDA? Any advice would be much appreciated.

Thanks in advance!

Pay a lawyer a couple hundred bucks to read the contract and tell you your options. Good luck.

You might want to change your language in your contract that gets signed.

Have the party listed and or assigns so if they put into an LLC or whatever it still applies.

Also better wording might be the fee is (paid at closing, as a CONDITION of closing). That way title or attorney will not want to close unless you are paid the amount.

RESPA for residential has laws that apply to fees on a HUD 1 that do not apply to commercial properties.

Good Luck. Look for attorney. Rocketlawyer.com has some cheap online questions and answers etc.

If your contract is really loose they might be able to take advantage on this one.

No legal advice given. 

if your not a real estate agent and your not their w 2 employee I suspect your out of luck. they can just not pay you at all.

all those NDA NC agreements to me are just flimsy paper unless you have the money to litigate which 99% of people in these little transactions don't .. they are meaningless documents.

that the bigger players just ignore and never speak to you again.. @Joel Owens   Joel I know in your line of work you have to be [email protected]@@m sure you handle your compensation in your agreements and I suspect your a licensed broker to back it up..

What you're talking about (your fee) doesn't belong in an NDA.  An NDA covers material that's to be confidential.  It should call out the specific material being covered, who's covered, term, and penalties for improper disclosure.  What you're talking about are contract terms.  

You should have a separate contract with your buyer for terms of the purchase.  That would outline your  payment for the property transaction.

Your out here is to refuse to close.  But if you're just bird dogging the property and do not have any contract for it then you have little leverage.  Further, you may well be violating your states real estate agent laws if you're collecting a fee on a transaction and you're not licensed.

Unless you are a licensed agent, what you describe, attempting to collect a fee upon completion of a transaction for introducing the buyer and seller is likely violating license law in your state, 

A contract to carry out an illegal act is void.

They likely don't have to pay you anything, if you don't have the property under contract to use as leverage.

It seems like you actually have an NDA & Fee Agreement wrapped into one document. This is fairly typical of parties not wanting to pay the little guy. My feeling is that you don't have to worry about various licensing authorities since it does not sound like you were working as a realtor.

What you may want to consider is taking the path of a mechanic's lien. If you try and sue your investor in just standard breach of contract, they invariably will be able to outspend. A mechanic's lien may work very well since your lien would possibly take a superior position to any other liens regardless of when you filed the lien. You would want to check your specific state law but you are not any different than a plumber who has done work at an agreed upon price and are not getting paid. If you were awarded a mechanic's lien then you would simply start foreclosure proceedings and invariably you would get paid in full.

The first step would be to file a notice of intent to file lien. That would certainly get your phone calls returned but buckle in and don't worry about working with this investor again. Sounds like this relationship is already burned.

I am not an attorney and you would want to confirm with an attorney since I cannot give legal advice.

Best of luck!

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here