A listing broker sells an office building to a syndicate of which the broker is a member without informing the seller of this interest. Before closing, the seller discovers the broker’s interest and refuses to sell. What would happen in a civil suit to collect a commission?

Hey there, let's dive into a challenging question from the CA real estate license exam, focusing on agency law. A listing broker sells an office building to a syndicate of which the broker is a member without informing the seller. The seller discovers this and refuses to sell. The question is: What would happen in a civil suit to collect a commission?

Great start! The key concept here is the broker's disclosure requirements and commission rights. The correct answer is C, the broker would be awarded their full commission. Let me explain why. Even though the broker violated the disclosure requirements by not informing the seller of their interest in the syndicate, this doesn't negate their right to a commission.

Exactly. The broker fulfilled their primary obligation under the listing agreement: procuring a ready, willing, and able buyer. The syndicate was prepared to purchase at the agreed terms. The seller's refusal to complete the transaction after discovering the broker's interest doesn't absolve the broker of their performance of the essential service.

That's right. The seller's refusal to sell after learning the broker's interest doesn't negate the broker's performance. It's a challenging question because it blends ethical disclosure obligations with contractual commission rights.

Sure. Option A suggests the case would be transferred to the Real Estate Commissioner, but this is a civil suit over a commission dispute, not a licensing law violation. Option B is wrong because no commission would not be due simply because the broker procured a buyer, even if the disclosure was missing. And option D is incorrect because a mitigation hearing is not required in this scenario; it's not part of the commission dispute process.

It's an analogy: think of the broker as a matchmaker who finds a perfect date for a client but fails to mention they're related to the date. The matchmaker still did their job of finding a suitable partner, even though they broke trust by not disclosing the connection.

You're welcome! Remember, for commission questions, focus on whether the broker procured a ready, willing, and able buyer. If they did, the commission is typically due, regardless of disclosure issues. Keep up the good work!