[WSBARP] liability for a commission under a "referral agreement" with an unlicensed person

[John M. Riley III]

I recall a case Rosauers v. Springer.  I think it was factually distinct but addressed the entitlement to a commission.

John riley



John M. Riley, III
Principal | Witherspoon * Kelley
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From: wsbarp-bounces at lists.wsbarppt.com [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Rod Harmon
Sent: Friday, September 18, 2015 11:28 AM
To: REALPROP at yahoogroups.com; wsbarp at lists.wsbarppt.com
Subject: [WSBARP] liability for a commission under a "referral agreement" with an unlicensed person

An out-of-state real estate broker entered into a "Referral Agreement" with a property owner (Seller) with respect to commercial real property in this state.  The key provisions of the agreement are:

1.      Broker will provide property information and contact information for Seller to prospective buyers for the property with the intent that buyer will submit an offer on the property with the intent to purchase the property.

2.      Broker will have no further involvement in the process of evaluating the property or negotiating any potential transaction.

3.      Seller agrees to pay Broker a referral fee of 6% in case a transaction is completed with Buyer.



The Seller has sold the property to a Buyer introduced by the Broker to the Seller. Is the Broker entitled to collect his commission, or is he barred from collecting it by RCW 18.85.331?

That statute, set out in full below, provides that a prerequisite to a suit for compensation as a real estate broker is that the plaintiff was a licensed as such at the time of the "contract for the payment of compensation for any contemplated real estate transaction."  Does anyone know of any case law addressing a "referral agreement," however stylized, which attempts to skirt the statutes regulating real estate brokers.




RCW 18.85.331. License required - Prerequisite to suit for commission
It is unlawful for any person to act as a real estate broker, managing broker, or real estate firm without first obtaining a license therefor, and otherwise complying with the provisions of this chapter.
No suit or action shall be brought for the collection of compensation as a real estate broker, real estate firm, managing broker, or designated broker, without alleging and proving that the plaintiff was a duly licensed real estate broker, managing broker, or real estate firm before the time of offering to perform any real estate transaction or procuring any promise or contract for the payment of compensation for any contemplated real estate transaction.

Rod Harmon

RODNEY T. HARMON
       Attorney at Law
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      Bothell, WA   98041
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    www.rodharmon.com<http://www.rodharmon.com>
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