[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 12:39:48 PST 2015
Below is the listing agreement provision.
Rob Rowley
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
*From:* wsbarp-bounces at lists.wsbarppt.com [mailto:
wsbarp-bounces at lists.wsbarppt.com] *On Behalf Of *Rich Holland
*Sent:* Thursday, January 29, 2015 12:19 PM
*To:* WSBA Real Property Listserv
*Subject:* Re: [WSBARP] Commission Owed? Procuring Cause Where Broker
Locates A Willing Buyer But Residential Seller Refuses to Sell
I have to agree. If memory serves, a listing is actually a solicitation
for an offer. The Seller isn’t making a unilateral offer that can simply
be accepted on its terms unchanged. The Seller is really saying “if you
offer this I might take it”. Now I don’t know the precise wording of the
listing agreement itself, I suppose a listing agreement could include a
provision that says “IF we bring you a buyer that meets x,y,z you agree to
sell or pay us a commission” but I don’t understand that to be the issue
here.
Rich Holland
*From:* wsbarp-bounces at lists.wsbarppt.com [
mailto:wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com>]
*On Behalf Of *Justin Monro
*Sent:* Thursday, January 29, 2015 11:59 AM
*To:* WSBA Real Property Listserv
*Subject:* Re: [WSBARP] Commission Owed? Procuring Cause Where Broker
Locates A Willing Buyer But Residential Seller Refuses to Sell
Well I disagree with David. David’s issue is different if I am wrong then
correct me. But I did file a complaint in court and we did lose. The judge
stated in the ruling that a seller is not obligated to sell their property
even if the property is listed and then owe a commission. I tried to argue
that I was owed a commission because I presented a ready willing able
buyer, judge didn’t buy it because no mutual contract was completed by the
seller and the buyer therefore no commission owed to buyers broker.
The Listing contract is only between the listing agent and the seller, not
the buyer’s agent or broker.
IMO you will lose this argument, How is a judge to force a seller to pay a
buyer’s broker a commission when no PSA have been signed? judges are
reluctant to provide fees to a broker for which a seller has not signed a
PSA. Seller is only “offering” to the public to sell the property, the
listing agreement doesn’t mean that they have to sell the property to a
person and then the buyer’s broker is entitled to a commission.
Also a ready willing buyer is only a buyer who has “waived” all
contingencies and inspections.
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 <wsbarp-bounces at lists.wsbarppt.com>]
*On Behalf Of *David Williams
*Sent:* Thursday, January 29, 2015 11:30 AM
*To:* 'WSBA Real Property Listserv'
*Subject:* Re: [WSBARP] Commission Owed? Procuring Cause Where Broker
Locates A Willing Buyer But Residential Seller Refuses to Sell
I disagree with Justin as I’ve successfully litigated the issue of a ready,
willing, and able buyer entitling a real estate broker to a commission. My
take is that when a broker procures a ready, willing and able buyer (a
factual determination), writes an offer consistent with the listing terms,
and submits the offer to the seller, the broker has fully performed under
the listing agreement. The seller then owes a commission to the broker, but
does not have an obligation to sell the property to the RWA buyer. In my
case, the broker was awarded fees in addition to the commission.
The problem is that the broker will have to sue and prove that the buyer
was in fact, a ready, willing and able buyer and that requires the buyer to
cooperate by providing financial records.
Like Justin, I’m also a real estate broker.
David Williams
*From:* wsbarp-bounces at lists.wsbarppt.com [
mailto:wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com>]
*On Behalf Of *Justin Monro
*Sent:* Thursday, January 29, 2015 11:00 AM
*To:* WSBA Real Property Listserv
*Subject:* Re: [WSBARP] Commission Owed? Procuring Cause Where Broker
Locates A Willing Buyer But Residential Seller Refuses to Sell
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
CONFIDENTIALITY NOTE: This e-mail message contains information belonging to
The Monro Law Firm P.S. Inc. which may be privileged, confidential and/or
protected from disclosure. The information is intended only for the use of
the individual or entity named above. If you think that you have received
this message in error, please contact the sender. If you are not the
intended recipient, any dissemination, distribution or copying is strictly
prohibited.
*From:* wsbarp-bounces at lists.wsbarppt.com [
mailto:wsbarp-bounces at lists.wsbarppt.com <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 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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