[WSBARP] Commission Owed? Procuring Cause Where Broker Locates A Willing Buyer But Residential Seller Refuses to Sell

Thu Jan 29 10:59:55 PST 2015

No, I filed a complaint on this same issue in Sno. Co. court and lost in 2007. Read 18.86. Just because you have a buyer ready and willing, doesn’t mean the seller has to even sell their house at all.

I am a real estate broker too. The only time a broker is going to receive compensation/commission (maybe) is if the buyer uses another agent/broker to induce the sale if the original broker had already showed them this property or thereby using the listing agent and closing the deal. I have been successful in winning those arguments because the NWMLS has an arbitration provision that all members must use this arbitration process first in commission disputes.

But, your issue is different and I wouldn’t even approach it. Your client if they do proceed in court will lose and they will have to pay attorney fees.

Sincerely,

Justin K. Monro
Attorney at Law
The Monro Law Firm P.S. Inc.
1830 Bickford Ave. Ste 204
Snohomish, WA 98290
P:360.863.3728
F:360.863.3985

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From: wsbarp-bounces at lists.wsbarppt.com [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Rob Rowley
Sent: Thursday, January 29, 2015 9:41 AM
To: WSBA RPPT
Subject: [WSBARP] Commission Owed? Procuring Cause Where Broker Locates A Willing Buyer But Residential Seller Refuses to Sell

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 aprocuring 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 seeClients' 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.

[cid:image001.jpg at 01D03BB2.CD724560]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<mailto:rob at rowleylegal.com>
Web Site: www.rowleylegal.com<http://www.rowleylegal.com/>

Practice concentrated on business, real estate and general legal matters in Washington and Idaho.

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