Are Commissions Still Owing From Sales That Did Not Close?


You may be surprised to learn that in today's tough economic climate, brokers may have walked away from earned commissions and not even realized it, and buyers and sellers may still owe a commission even though a deal didn't close.

When the brokerage agreement or the purchase and sale agreement states the commission is to be paid upon the close of escrow, the law recognizes that the commission is earned at the time the buyer enters into the purchase and sale agreement (or in some cases sooner when a willing and able buyer is presented) and thus, must be paid regardless of whether escrow closes.

This article takes a closer look at the implications of RC Royal Development and Realty Corp. v. Standard Pacific Corp. (2009) 177 Cal.App.4th 1410.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Dawn Sweatt | Attorney Advertising

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