EDGAR REALTY AND ASSOCIATES, INC., APPELLANT,
v.
WILLIAM "TOM" MOBLEY, JR., AND A.M. REDD, JR., APPELLEES
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A real estate broker sued prospective purchasers for a brokerage commission based on an alleged oral contract to pay the broker if it obtained land for them to purchase. The trial court dismissed the complaint without leave to amend, but the appellate court reversed, holding that the complaint stated a valid cause of action despite the purchasers' subsequent failure to complete the transaction.
The court held that the complaint states a valid cause of action. A real estate broker may recover from a prospective purchaser if the purchaser has contracted to pay the commission, and in this case, the plaintiff specifically alleged an oral agreement by the defendants to pay the commission. The unsigned notation regarding payment to another broker does not bar the plaintiff's claim, and a release between the purchasers and seller does not bind the broker, who is not a party to that release.
[1] A real estate broker may recover a commission from a prospective purchaser if the purchaser has contracted to pay such commission.
[2] An unsigned notation on a purchase contract regarding commission payment does not necessarily bar a broker's claim for a commission.
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Join FLexlaw to unlock all legal intelligence“A real estate broker may not recover a commission from a prospective purchaser unless the purchaser has contracted to pay such commission.”
Establishes the general rule governing broker commission claims against purchasers
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Join FLexlaw to unlock all legal intelligenceEdgar Realty alleged an oral agreement with the defendants (prospective purchasers) whereby the defendants agreed to pay Edgar Realty a brokerage comm…
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PEARSON, TILLMAN (Ret.), Judge.
The plaintiff, appellant, brought an action to recover a real estate commission. Its amended complaint was dismissed without leave to further amend, and this appeal followed. The only unusual thing about the amended complaint is that the plaintiff claims an oral contract between it and the defendants, prospective purchasers, to pay plaintiff a brokerage commission for its services if it obtained land for the defendants to purchase. The complaint continues with allegations that the plaintiff did obtain land for defendants to purchase and that the defendants and the seller executed a binding contract for the purchase and sale of the land but that defendants thereafter failed to go forward on their contract to purchase. We hold that the complaint states a cause of action, and reverse.
A real estate broker may not recover a commission from a prospective purchaser unless the purchaser has contracted to pay such commission. Borinsky v. Cohen, 86 So. 2d 814 (Fla.1956); Williams v. Stewart, 424 So. 2d 204 (Fla. 2d DGA 1983); Bruce v. American Development Corp., 408 So. 2d 857 (Fla. 3d DCA 1982). In this case, however, the appellant has specifically alleged an oral agreement by the prospective purchaser to pay a commission.
Attached to the complaint are several documents which are important because of defendants’ claim that the documents con clusively show that plaintiff cannot recover. These exhibits are: (1) the contract whereby defendants agreed with the seller to purchase the property, (2) an amendment to the same contract, (3) a “hold harmless agreement” wherein the defendants agreed to indemnify the seller for any claims for a real estate commission, and, (4) an agreement between plaintiff and another broker to share any commission paid upon the transaction.
Defendants first urge that a notation on the contract for sale and purchase provides for payment of the commission to another broker, Appelquist & Ripley, Inc. The unsigned notation says simply:
Buyer to pay 10% professional fee to Appelquist & Ripley, Inc. to be shared equally with Edgar Realty
This unsigned notation is not a bar to plaintiffs claim.
Defendants’ second contention is that because the signed contract for sale and purchase provided that the purchasers could forfeit their deposit and then be free of all obligations under the contract, and because this contingency is shown by the other exhibits to have actually happened, the purchasers are free of their promise to pay a commission. Since the plaintiff is not a party to this presumed release it cannot be bound by it.
We conclude that the complaint states a cause of action. Accordingly, the judgment is reversed, and the cause remanded for further proceedings in accordance herewith.
Reversed and Remanded.
SHIVERS and ZEHMER, JJ., concur.
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Citator
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ST. JOE Corp. v. McIVER, 875 So. 2d 375 (Fla. 2004)…existence by a preponderance of the evidence. Batista v. Walter & Bernstein, P.A., 378 So. 2d 1321, 1322 (Fla. 3d DCA 1980). Oral brokerage contracts, like other oral contracts, are valid and enforceable. See Edgar Realty & Assocs., Inc. v. Mobley, 513 So. 2d 1350, 1351 (Fla. 1st DCA 1987) (holding that a real estate broker’s allegations of an oral contract with prospective purchasers stated a cause of action); 7 Fla. Jur.2d Brokers § 5 (1997) (providing that a contract of employment between a broker and a pr…
Authorities Cited
- Borinsky v. Cohen, 86 So. 2d 814 (Fla. 1956)
- Bruce v. Am. Dev. Corp. & Kenneth Mamula, 408 So. 2d 857 (Fla. 3d DCA 1982)
- Williams v. Stewart, 424 So. 2d 204 (Fla. 2d DCA 1983)