I recently had a realtor inquire about a situation involving unpaid commissions that they believed they were owed to them from their broker. This realtor had been the one that had brought the buyer and seller together and had handled negotiations throughout the transaction. The broker, however, refused to pay the realtor commissions on the sale.
In order to be considered the procuring cause of a transaction, you must have brought a buyer and a seller together and your continuous negotiation and involvement will have been the cause of a sale. If you believe that you are owed a real estate commission for being the “procuring cause” of a transaction, however that commission is not being paid, your recourse is to bring a civil suit in court against the party withholding payment of your commission. Although some think that the Florida Real Estate Commission handles commission disputes, it does not. If your broker is withholding commissions from you, this would be a contract dispute and the terms of how your commissions are paid would be detailed in your independent contractor agreement or employment agreement. These documents may also determine whether or not you must participate in arbitration in the event of a dispute.
In its decision of a case involving a real estate commission dispute, the Florida Supreme Court has more clearly defined the criteria of the actions that must be taken in order for you to receive a commission. The first is that you must have taken affirmative action to initiate negotiations and have brought the buyer seller together. Second, you must have been continually involved in negotiations unless you have been intentionally excluded by the buyer and seller.
Once you have successfully sued for your commissions and have a judgment against another broker, if the other broker is still not paying you, you can file a complaint with the Florida Real Estate Commission (FREC). FREC will investigate your complaint and then take disciplinary action against the other broker.
As always, please feel free to contact me if you have any questions on this or other legal issues.
Don Gonzalez, Esq.