{"id":34040,"date":"2018-12-17T16:36:18","date_gmt":"2018-12-17T14:36:18","guid":{"rendered":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/?p=34040"},"modified":"2025-05-22T13:10:03","modified_gmt":"2025-05-22T10:10:03","slug":"faq-securing-your-brokers-commission","status":"publish","type":"post","link":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/2018\/12\/17\/faq-securing-your-brokers-commission\/","title":{"rendered":"FAQ: Securing Your Broker’s Commission"},"content":{"rendered":"

NYC-based\u00a0boutique law firm Pardalis & Nohavicka brings the latest legal updates from the world of real estate to PropertyShark.\u00a0Pardalis & Nohavicka\u00a0handles an eclectic array of matters, representing individuals and business owners in civil litigation, criminal cases and business transactions,\u00a0currently litigating and representing clients in New Jersey, Pennsylvania, Massachusetts, California, Greece, and the United Kingdom.<\/em><\/strong><\/p>\n

A broker has to establish \u201cprocuring cause\u201d in order to collect the commission. This means that he or she \u201cmust establish a chain of circumstances\u201d or events that lead to the sale in order to be entitled to the broker\u2019s fee. Every broker should consider the following questions in evaluating their potential rights to a broker\u2019s commission under New York State law:<\/p>\n

Q:<\/strong>\u00a0When is a real estate broker entitled to a commission?<\/strong><\/p>\n

A:\u00a0<\/strong>New York case law clearly establishes that three elements are required to enable the broker to recover a real estate commission. These elements require that the real estate broker (1) be a duly licensed broker, (2) enter into an implied or express contract with the party to be charged with paying the commission, (3) that the broker be the procuring cause of the transaction.<\/p>\n

Q<\/strong>: What does it mean for a broker to be duly licensed?<\/strong><\/p>\n

A:<\/strong> A broker is duly licensed when they possess a real estate license or are otherwise certified to work as a real estate broker in New York State.<\/p>\n

Q:<\/strong> When does a broker have a contract – express or implied – with the party to be charged with paying the commission?<\/strong><\/p>\n

A:\u00a0<\/strong>A broker who has an existing right under a real estate contract to a commission may recover that commission as a party to an existing, express contract or agreement.<\/p>\n

Q:\u00a0What is an implied contract?<\/strong><\/p>\n

A:<\/strong>\u00a0An implied contract is an agreement created by the actions of the parties involved. In this regard, the broker could establish a claim to commission based on the services that he or she provided to the vendor or franchisee. These services might involve participating in direct negotiations for the sale of the real estate, or listing the property for sale. The court would then have to decide if the broker could present sufficient evidence to support her claim for a commission based on an implied contract.<\/p>\n

Q:\u00a0When a broker does not have either an implied or express contract with the party charged with paying the commission, can he or she still recover their commission?<\/strong><\/p>\n

A:<\/strong>Yes, a real estate broker can still recover under the contract theory of q<\/em><\/span>uantum meruit<\/em><\/span>, for the reasonable value of their services if they can prove that the seller or other party was unjustly enriched and implicitly accepted their services based upon the broker\u2019s performance. A good example of this is\u00a0\u00a0Gluck & Co. Realtors, LLC v. Burger King Corp<\/a>.<\/em><\/p>\n

Q:<\/strong> What does a broker have to prove in court to show that he or she is the procuring cause of the real estate transaction?<\/strong><\/p>\n

A:<\/strong> This is a tricky question that is often fact-specific to each individual real estate transaction. New York cases make it clear that \u201cto establish that a broker was the procuring cause of a transaction, the broker must establish that there is a direct and proximate link, as distinguished from one that is indirect and remote, between the bare introduction and the consummation.\u201d See<\/em> Douglas Elliman, LLC v Silver<\/em>. [1]<\/a>In this case, the court still found that while the broker was not involved in the negotiations leading up to the sale, he did enough work to generate a \u201cchain of circumstances\u201d that lead to the sale.<\/p>\n

Q:\u00a0What should I expect to encounter in court if I am a broker filing for real estate commissions?<\/strong><\/p>\n

A:\u00a0<\/strong>The result may rarely be clear cut, but the courts generally try to protect the plaintiffs\u2019 interests when factually plausible complaints are filed. This means that most litigants can easily withstand motions for summary judgment to deny their relief if they can raise genuine issues of act to show that the broker was indeed in fact the \u201cprocuring cause of the sale\u201d in addition to being a licensed broker who generally entered into an express or implied contract for his brokerage commission.<\/p>\n

For example, in Talk of the Town Realty v. Geneve,[2]<\/strong><\/a> <\/em>the court denied the vendor\u2019s motion for summary judgment to dismiss the plaintiff\u2019s motion for broker commissions in finding that genuine issues of material fact existed as to whether the broker generated a \u201cchain of circumstances\u201d that ultimately lead to the sale.<\/p>\n

About\u00a0<\/em><\/strong><\/p>\n

Expert insight and analysis was provided by Joseph D. Nohavicka, Partner, Pardalis & Nohavicka, LLP and\u00a0Jacqueline Weiss.\u00a0 Jaqueline Weiss is a former law clerk with Pardalis & Nohavicka, currently externing with New York State Office of The Attorney General.\u00a0 <\/em><\/strong><\/p>\n

With more than 25 years experience, Joe Nohavicka’s\u00a0areas of practice range widely and include: employment law, insurance, ethics, criminal and\u00a0 general appellate, and trial litigation.\u00a0 He is also a prolific legal commentator with multiple\u00a0 publications in the prestigious New York Law Journal and the New York\u00a0 State Bar Journal.<\/em><\/strong><\/p>\n

[1]<\/a> See<\/em> Douglas Elliman, LLC v Silver<\/em>, 136 A.D.3d 658, 24 N.Y.S.3d 207 (N.Y. App. Div.),\u00a0leave to appeal dismissed,<\/u>\u00a027 N.Y.3d 1015, 52 N.E.3d 239 (2016).<\/p>\n

[2]<\/a> Talk of the Town Realty v. Geneve, <\/em>109 A.D. 3d 981 N.Y.S. 2d 550(2013)<\/p>\n","protected":false},"excerpt":{"rendered":"

NYC-based\u00a0boutique law firm Pardalis & Nohavicka brings the latest legal updates from the world of real estate to PropertyShark.\u00a0Pardalis & Nohavicka\u00a0handles an eclectic array of matters, representing individuals and business owners in civil litigation, criminal cases and business transactions,\u00a0currently litigating and representing clients in New Jersey, Pennsylvania, Massachusetts, California, Greece, and the United Kingdom. A…<\/p>\n","protected":false},"author":49,"featured_media":34030,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[9499,376,328,388,796],"tags":[11172],"class_list":["post-34040","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-legal","category-new-york-commercial-real-estate","category-new-york-real-estate","category-real-estate-broad","category-how-to","tag-old-how-to"],"yoast_head":"\nFAQ: Securing Your Broker's Commission - PropertyShark Real Estate Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/2018\/12\/17\/faq-securing-your-brokers-commission\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"FAQ: Securing Your Broker's Commission\" \/>\n<meta property=\"og:description\" content=\"NYC-based\u00a0boutique law firm Pardalis & Nohavicka brings the latest legal updates from the world of real estate to PropertyShark.\u00a0Pardalis & Nohavicka\u00a0handles an eclectic array of matters, representing individuals and business owners in civil litigation, criminal cases and business transactions,\u00a0currently litigating and representing clients in New Jersey, Pennsylvania, Massachusetts, California, Greece, and the United Kingdom. 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