By Coleman P. Hengesbach, Esq.
Most real estate brokerages represent their sellers under an Exclusive Right of Sale Listing Agreement. In most of these real estate contracts, it requires the seller to pay a percentage of the total sale proceeds to the real estate brokerage as a commission for their services should the property be transferred or sold within the time period specified in the contract. Most of these agreements are standard contracts routinely used in real estate transactions. Generally speaking, if the property is transferred to another party, the seller is obligated to pay a commission to the broker, even if the broker did not secure the buyer.
But what happens if the seller decides to pull the property from the open market before the expiration of the listing agreement?
Sometimes, sellers become frustrated that their property is taking too long to be sold. This could be for a variety of reasons, such as a slow market demand, an over-valued sale price, or poor marketing by the broker. Regardless of the reason, sellers often decide to simply take their house of the market and try again at a later date. However, unless expressly agreed upon by both parties, if the seller then attempts to transfer or sell their property within the time period specified in their original listing agreement, they still owe a commission to the broker. A broker may have a legal cause of action for breach of contract against the seller should they find themselves in this position.
How long is my claim for the unpaid commission valid?
Under Florida law, a breach of contract claim is only enforceable for five (5) years from the date of the breach. That means, if you had sellers stiff you on a commission within the last five (5) years, you can still seek to enforce the commission under a breach of contract action.
How do I recover my commission?
If you are a broker who finds yourself in this position, you should seek to consult with a real estate attorney for a free evaluation of your rights. A lawsuit may be necessary to enforce a broker’s commission. The good news is, in many listing agreements, it provides the contractual right to recover your attorney’s fees and costs if legal proceedings are needed to enforce the owed commission.
At Hengesbach & Hengesbach, we have successfully handled these types of cases on behalf of brokers and realtors who have been cheated out of their commissions. Contact us today for a free evaluation of your case by email at coleman@naturecoastlaw.com or by phone at (352) 683-1963.
