[WSBARP] Commission Owed? Procuring Cause Where Broker Locates A Willing Buyer But Residential Seller Refuses to Sell
Rob Rowley
rob at rowleylegal.com
Thu Jan 29 09:40:42 PST 2015
Is a licensed Washington residential real estate broker entitled to a
commission where they locate and have an signed RESPA with a ready, willing
and able residential purchaser for the exact sale amount set forth in the
listing agreement but the seller is being incredibly difficult and refuses
to sell to the buyer. I’m familiar with the procuring cause doctrine. See
below.
I've cut-and-paste below the language in the listing agreement which
appears to grant the listing agent a commission where there is no closed
sale but a ready, willing and able purchaser for the exact sale amount.
Commission owed when “Firm procures a buyer for the Sale of the Property on
the terms of this Agreement….”
Your thoughts?
Rob Rowley
Spokane
4. TOTAL COMMISSION. (Complete all applicable provisions) If, while this
Agreement remains in effect, Firm procures a buyer for
the Sale of the Property on the terms in this Agreement or on other terms
acceptable to Seller, or Seller directly or indirectly Sells or contracts
to Sell any interest in the Property, then Seller Will pay Firm a
commission:
in the case of a sale or exchange,
*6 ·000* % of the total selling price, but not less than$ 2,000.
00
; in the case of a lease, % of the total gross
rents payable during the first year(s) of the lease
term plus %of the total gross rents
payable during the remainder of the lease term. If an agreed lease provides
for one or more renewal option(s) which are exercised.
an additional commission of % of the rents
payable during each such renewal period shall be paid in cash upon
exercise of each such renewal option. If an agreed lease provides an option
for the purchase, then the sale commission shall be
¶ 18 Prudential argues first that the trial court erred in concluding as a
matter 996
<https://scholar.google.com/scholar_case?case=12662020904116579957&q=%22procuring+cause%22&hl=en&as_sdt=4,48#p996>
*996
<https://scholar.google.com/scholar_case?case=12662020904116579957&q=%22procuring+cause%22&hl=en&as_sdt=4,48#p996>
of
law that it was not the *procuring cause* of the Youngs' sale to the
Eastmans. Under the *procuring cause* of sale doctrine, when a party is
employed to procure a purchaser and does procure a purchaser to whom a sale
is eventually made, that party is entitled to a commission regardless of
who makes the sale. *Prof'ls 100 v. Prestige Realty, Inc.,* 80 Wash.App.
833, 836-37, 911 P.2d 1358 (1996)
<https://scholar.google.com/scholar_case?case=5557530725935576541&q=%22procuring+cause%22&hl=en&as_sdt=4,48>
(citing *Willis v. Champlain Cable Corp.,* 109 Wash.2d 747, 754, 748 P.2d
621 (1988)
<https://scholar.google.com/scholar_case?case=14752154418933755729&q=%22procuring+cause%22&hl=en&as_sdt=4,48>
(citing,
in turn, *Feeley v. Mullikin,* 44 Wash.2d 680, 683, 269 P.2d 828 (1954)
<https://scholar.google.com/scholar_case?case=17316328426877481457&q=%22procuring+cause%22&hl=en&as_sdt=4,48>)).
A broker is a*procuring cause* of a sale if it sets in motion a series of
events culminating in the sale and, in doing so, accomplishes what the
broker undertook under the agreement.*Roger Crane,* 74 Wash.App. at 776,
875 P.2d 705
<https://scholar.google.com/scholar_case?case=18404900289712929203&q=%22procuring+cause%22&hl=en&as_sdt=4,48>
(quoting *Bonanza Real Estate, Inc. v. Crouch,* 10 Wash.App. 380, 385, 517
P.2d 1371 (1974)
<https://scholar.google.com/scholar_case?case=6205961917513517522&q=%22procuring+cause%22&hl=en&as_sdt=4,48>).
The doctrine provides a default standard for liability to pay a commission
where the parties have not agreed on a different standard, or where the
parties' agreement as to when a commission will be paid proves ineffective.
*See **Willis,* 109 Wash.2d at 755, 748 P.2d 621
<https://scholar.google.com/scholar_case?case=14752154418933755729&q=%22procuring+cause%22&hl=en&as_sdt=4,48>.
In cases where the parties' contract includes a standard for liability for
a commission that is consistent with the concept of *procuring cause* of
sale, case law dealing with the *procuring cause* standard applies. *Prof'ls
100,* 80 Wash.App. at 837-38, 911 P.2d 1358
<https://scholar.google.com/scholar_case?case=5557530725935576541&q=%22procuring+cause%22&hl=en&as_sdt=4,48>.
But a contract can provide for payment of commissions to a broker for being
something less than the *procuring cause* of sale and when it does, the
terms of the contract control unless the contract is ineffective. *Id.; and
see**Clients' Serv., Inc. v. Pupo,* 71 Wash.2d 610, 615, 430 P.2d 552 (1967)
<https://scholar.google.com/scholar_case?case=3489881059366442515&q=%22procuring+cause%22&hl=en&as_sdt=4,48>
(whether
the broker must have been the *procuring cause* of the sale in order to be
entitled to commission depends on the language of the broker's agreement).
¶ 19 The terms under which Prudential was entitled to a commission *during* the
term of its listing agreement with the Youngs included instances consistent
with the concept of *procuring cause* of sale. But the tail provision in
this case is not couched in *procuring cause* terms. It provides:
If the property or any portion thereof or any interest therein is, directly
or indirectly, sold, exchanged, leased or is purchased under an option,
within 365 days after the expiration of this Agreement to any person with
whom a Broker negotiated or to whose attention the Property was brought
through the signs, advertising, or any other action or effort of a Broker,
Broker's agents, employees or subagents, or on information secured directly
or indirectly from or through a Broker during the term of this Agreement,
then Seller shall pay Broker the above compensation.
CP at 37, ¶ 8(a). Because the Eastmans' offer and the sale of the Youngs'
home occurred after the listing agreement expired, it is the tail provision
of the listing agreement that controls. Prudential is entitled to a
commission only if the conditions of the tail provision, not the *procuring
cause* doctrine, are satisfied.
*Robert R. Rowley* | Attorney at Law
505 W. Riverside Ave, Suite 500
Spokane, WA 99201
Telephone: (509) 252-5074
Mobile: (509) 994-1143
Facsimile: (509) 928-3084
Email: rob at rowleylegal.com
Web Site: www.rowleylegal.com
Practice concentrated on business, real estate and general legal matters in
Washington and Idaho.
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