Broker Commission Disputes

For a broker to recover their commission they must procure cause. Although difficult to determine, themost commonly accepted definition of procuring cause is that the broker introduced the parties and their actions produced a ready, willing, and able buyer. The procuring cause doctrine applies in commercial and residential real estate and is decided by a jury, not a judge.

For a real-estate broker to establish a case against the seller for recovery of their real estate commission, the broker must possess a valid real-estate license, have an employment contract with the seller (verbal or written), perform the terms of the contract, and prove the seller’s breach by refusing to pay the agreed commission. In response to the broker’s action for recovery of a commission, a seller may assert that the broker breached a fiduciary or contractual duty owed to the seller or that the broker did not have a real-estate license at the time of the transaction. Other defenses that may be assertedare fraud in the inducement, the statute of frauds, and abandonment i.e. the broker has abandoned his or her obligations to sell the property.

If a broker is successful in procuring cause, the damages against the seller may include commission, interest, and punitive damages. In some cases, attorneys’ fees and costs can also be awarded to the successful party.