Broker Commission Lawsuits: What Are They and How to go About Them?

Broker commission lawsuits allow brokers to exert their rights to recover their commission. It’s a natural rule that s/he who does the work must get the pay. These lawsuits ensure that brokers will always be able to exert their rights to get paid.

Broker commission lawsuits are also called recovery of commission lawsuits. They are essentially based on the procuring cause doctrine.

The Procuring Cause Doctrine

The procuring cause doctrine seeks to answer the question whether the broker is entitled to recover commission over a sale s/he oversaw. If the broker can show that his or her efforts led to conclusion of the sale either through negotiation or facilitation, then procuring cause is proved.

Elements of a Broker Commission Lawsuit

As with most aspects of law, there are certain key things that must be proved by a broker against the seller in their action against the seller. If you are an aggrieved broker, you must identify these elements and they must all be proved.

• You must show that you have a valid license to practice real estate.
• You need to prove that you have an employment agreement with the seller, whether verbal or written, under which you were required to do a job.
• Performance of the contract is vital. You need to prove that you performed the contract according to the terms you agreed to.
• The last thing to prove is that the seller has failed to perform their part of the contract by refusing to pay the agreed commission.

Perhaps the most contentious element that must be proved by the broker is: performance of the terms of the contract. It is a likely area that the seller will contest and may determine whether the broker is entitled to a commission on the transaction.

Possible Defenses

If you’re a seller defending against a recovery of commission case, there are many defenses that you can assert against the broker. It is a defense to show that the broker did not have a real estate license at the time of the transaction.

It can also be shown that the broker abandoned their obligations to sell the property or that they were not responsible for the actual conclusion of the sale. Further defense includes raising a breach of fiduciary duty on the part of the broker or fraud in the course of the transaction.

Winning Your Case

Clearly, broker commission lawsuits have a tendency to become very contentious with both parties making radically different claims. Regardless of whether you are suing as the broker or defending as the seller, sound legal advice and representation can help tilt the case in your favor.