Ask Pete: What are my legal rights if a seller does not pay my commission?


I’m a realtor who listed a seller’s home, which needed substantial repair. After the seller refused to agree to incur the repair cost, the buyer backed out, and escrow fell through.  A few months after the listing period had expired, the seller sold the home at a discount to someone I had not procured for him them, and paid me no commission from escrow. My supervising broker is not inclined to pursue my commission.

What are my legal rights if a seller does not pay my commission What should I do?

Answer: The claim for the commission is your supervising broker’s. If he won’t enforce it, you may have him assign his commission rights to you to pursue.

Although escrow didn’t close during the listing period, most listing agreements provide that if it thereafter closes to a buyer you introduced to a seller during the listing period, you’re entitled to a commission payable from escrow to your supervising broker. Here there was none, but the seller breached his listing agreement with you by making it impossible for you to sell the property at the listed price or a lower one to which he would agree.

You need good legal counsel here to recover the commission from the seller.  In arbitration or court, he may contend that you were negligent in serving him, attributing the loss of sale during the listing period to you, hoping to disavow your right to receive a commission from him.  So your file’s record of events, i.e., your emails to him and notes of your phone conversations with him and others, and how they are portrayed by our counsel to the arbitrator/judge may make the difference in your action for recovery, which may include your attorney’s fees. But if you lose, their attorney’s fees are payable by you.  So you need a clear case of liability, and strong counsel to prove it.

I have successfully prosecuted such a case for the realtor’s commission.

Disclaimer: The information herein contained is intended to be for general education purposes only, and should not be relied upon without the advice of an attorney familiar with the facts of the real-life situation.