Favourable court decision for Realtor

This just came to my attention after I posted about whether agents use the Buyer Broker Agreement.

California appellate court enforced a real estate broker's right to compensation under C.A.R.'s buyer-broker agreement.

Schaffter v. Creative Capital Leasing Group, essentially involved a buyer who, in 2002, entered into C.A.R.'s buyer-broker agreement, which was a precursor to the current Buyer Representation Agreement-Exclusive (Form BRE). The agreement obligated the buyer to compensate the real estate broker upon entering into 16 contracts to purchase new units in certain condominium developments. The buyer closed escrow on eight of these transactions and defaulted on the others, yet failed to pay the broker the compensation as promised. For the eight defaulted transactions, the buyer and seller mutually agreed to return all but $1,000 of the buyers' deposits to the buyer.

The broker in this case sued the buyer for the unpaid compensation for all 16 transactions. C.A.R. submitted an amicus curiae or "friend of the court" brief in support of the broker's position. The buyer, however, argued that the mutual agreement between the buyer and seller to unwind the transactions extinguished the buyer's obligation to pay the compensation. The court disagreed. The court observed, "As CAR explains in its amicus brief, the 'default' provision of the Buyer Broker Contract recognizes that when a buyer defaults under a purchase agreement, it would not be fair to deny the broker the right to be paid for services rendered under the Buyer Broker Contract." The court also stated, "The seller's post-default conduct is, of course, immaterial to determining whether the buyer defaulted." The court awarded the broker the compensation owed for all 16 transactions, plus attorneys' fees and costs.

Way to go!