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?
Question & Answer
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The case would be transferred to the Real Estate Commissioner.
Transferring the case to the Real Estate Commissioner would only occur if there were licensing law violations, not for a commission dispute. This option confuses regulatory enforcement with civil litigation over contractual obligations.
No commission would be due.
No commission would not be due because the broker successfully procured a ready, willing, and able buyer. The seller's refusal to close after discovering the broker's interest doesn't erase the broker's performance of their contractual duty.
The broker would be awarded their full commission.
The court would demand a mitigation hearing.
A mitigation hearing is not required in this commission dispute scenario. This option incorrectly suggests a legal process that doesn't apply to this type of real estate commission case.
Why is this correct?
The broker would be awarded their full commission because they fulfilled their primary obligation under the listing agreement: procuring a ready, willing, and able buyer. The seller's refusal to complete the transaction after discovering the broker's undisclosed interest doesn't negate the broker's performance of this essential service.
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