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How to Prove the Breach of a Broker's Commission Agreement Under NY Law


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1/1/2016
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It should come as no surprise that as the economy continues to sputter, falter, or whatever your term of choice may be, that many real estate brokers have taken an increasingly aggressive stance in protecting their commissions. The flip side of that same coin is that the other parties to the deal have likewise hardened their positions of refusing to compensate brokers whom they believe did little or nothing to bring the deal to fruition. And that is precisely what happened in the breach of contract and co-brokerage agreement case of Susan D. Fine Enterprises LLC v. Steele. Setting forth the law underlying brokerage commission agreements in New York, the Court stated as follows: "It is well settled that a broker seeking a commission must establish that: 1) she is duly licensed; 2) she had a contract, express or implied, with the party to be charged with paying the commission; and, 3) she was the procuring cause of the sale. Greene v. Helha. P, 51 NY2d 197,206 (1980) ... To qualify for a commission, however, a broker need not have been involved in the ensuing negotiations or the completion of the sale ... Rather, where as here, the broker was not involved in the negotiations leading up to completion of the deal, the broker is still entitled to a commission if she can demonstrate that she “created an amicable atmosphere in which negotiations proceeded or that [she] generated a chain of circumstances that proximately led to the sale." But here's the sticky part: "As to whether plaintiff was the procuring cause of the sale, courts are in agreement that the issue of procuring cause is a generally a question of fact to be determined at trial."



Category: Breach of Contract

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