Real Estate Broker Commission Disputes in Florida

Recovering Your Unpaid Broker’s Commission: If you’re a real estate broker with an unpaid commission from a client our Firm may be able to assist. We can further assist business brokers who may be due a commission from a seller (or buyer) in connection with the sale of a business in the state of Florida.

Legal Basis for Recovering Your Broker’s Commission: A broker’s entitlement to recover an unpaid commission may be based on a written agreement between the broker and the client. If there is no formal agreement, or, if the broker’s agreement expired or has been nullified for some reason, it’s still possible for the broker to recover a commission on grounds of “procuring cause.”

Quick Overview on Real Estate Commission Disputes:

Exclusive Right of Sale: The “Exclusive Right of Sale” contract (“ERS”) is a type of contract which a broker may use with a client. The ERS contract gives the broker the exclusive right, during a fixed period of time, to sell the property on behalf of the client. During this fixed time period the client is not permitted to sell the property on his own or through another agent. If the client sells the property on his own while the ERS contract remains in effect, the broker is legally entitled to his broker’s commission.

In Law Realty, Inc. v. Pagliarulo, 385 So.2d 1093 (4 th DCA 1980), the real estate broker’s listing agreement provided that the owner agreed to give the broker a period of “6 months from this date the exclusive right and authority to sell…..” In spite of the listing agreement, the owner/seller sold the house himself within the six month period and failed to pay the brokerage commission to his broker. Since the court found the language in the listing agreement to be clear and unambiguous, it held that the broker was entitled to his commission.

Exclusive Agency Contract: An exclusive agency contract, or exclusive agency to sell, is less stringent than the exclusive right of sale. In an exclusive agency, the owner doesn’t forfeit his right to sell the property on his own. So, if the owner sells the property on his own the owner has no obligation to pay a commission to the broker.

Procuring Cause Doctrine: A real estate broker may also be entitled to a commission, without a formal agreement, as a “procuring cause” to the sale. This doctrine is well recognized under Florida case law. To earn a commission as the “procuring cause” of the sale, the broker must:

  • bring the purchaser and seller together through some affirmative act; and,
  • the broker must remain involved in the continuing negotiations between the seller and the buyer unless the seller and buyer intentionally exclude the broker from the negotiations.

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In Venturevest Realty Corp. v. A.K.S.I.P. Corp., 793 So.2d 1054 (3 rd DCA 2001), AKSIP, an owner of a commercial property, initially retained Venturvest to be its exclusive broker to sell the property, which also included an out parcel. GFS, a buyer, offered to purchase the commercial property but not the seller’s out parcel. Negotiations were initially held but no sale was consummated at first. A few months later, the seller terminated its listing with Venturvest and hired a new broker, Terranova. However, the seller agreed to give Venturvest a 60-day protection period to sell the property. Venturvest then contacted GFS, but the buyer refused to deal with Venturvest.

Eventually, the commercial property was sold to GFS through Terranova. Venturvest sued for its commission. The court determined that Venturvest was the procuring cause of the sale, and was entitled to a commission. Material to the court’s decision was that Venturvest brought the buyer and seller together and engaged in continuous negotiations with the buyer until all negotiations ceased for five months. Also, when Terranova brokered the sale to GFS, Venturvest was excluded from the negotiations.

Geographical Interest: Our firm services real estate brokers in Broward and Palm Beach, including Coral Springs, Boca Raton, and West Palm Beach. We can also assist real estate brokers in just about any other part of Florida.

If you have a question about a real estate commission dispute, please call us at 561-638-8593 or send an email to joseph@rosenlawboca.com.