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We have a real estate agent, Agent A. Agent A is our selling…

We have a real estate...
We have a real estate agent, Agent A. Agent A is our selling agent. Agent A showed us some homes to buy/rent on one day. We never signed an exclusive buyer representation agreement with Agent A.

We don't want to work with Agent A. We want to work with Agent B but we felt bad so we talked to Agent B and negotiated a 25% referral commision for Agent A. We never got that in writing for either party. We communicated the 25% to Agent A verbally. Agent A and Agent B never spoke. Agent A and Agent B never agreed to anything in writing.

We had previously only sent a text to Agent A, "We got you 25% of commission"

Things have gone bad with Agent A and don't feel like she even deserves any type of commission. We haven't bought any new home with Agent B yet. We are working with Agent B.

By law is Agent A entitled to 25% of the commission from Agent B if we buy a home? Can Agent A sue Agent B for 25% using that text from us?
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Answered in 41 minutes by:
4/22/2014
Brent Blanchard
Category: Real Estate Law
Satisfied Customers: 1,975
Experience: Thirteen years of experience in real estate matters, HOA disputes and drafting HOA documents
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Thank you for your question. Sorry to hear about the disappointing professional contacts there.

A "whole heap" of agreements can be enforced under contracts law without anything signed, and even without anything in writing. This is especially true when there are multiple witnesses to what was said and they all agree. (The writing requirements are generally for purchases of goods over $500, definitely land purchases, and leases of land and employment contracts of MORE than a year--with a curious exception for "lifetime" employment because life *could* end in less than a year.)

I would expect a lawsuit, most likely in small claims, if any real estate agent who thought he or she was promised a percentage of some commission were to be left unpaid. These can get quite ugly since the licensing requirements and education and experience leave some of these people thinking they are attorneys.

California has some strict regulations on RE agents, starting with a general contracts rule in the CA Civil Code § 1624(a)(4) requiring the deal be in writing:

(4) An agreement authorizing or employing an agent, broker, or any other person to purchase or sell real estate, or to lease real estate for a longer period than one year, or to procure, introduce, or find a purchaser or seller of real estate or a lessee or lessor of real estate where the lease is for a longer period than one year, for compensation or a commission.

Note that this is for the RE agent to FIND a renter and it looks like it tracks the 1-year rule for the leases themselves.

Regardless of the requirement for a "writing", § 1624 has this regarding things like text messages:

(3) There is sufficient evidence that a contract has been made in any of the following circumstances:

(A) There is evidence of an electronic communication (including, without limitation, the recording of a telephone call or the tangible written text produced by computer retrieval), admissible in evidence under the laws of this state, sufficient to indicate that in the communication a contract was made between the parties.


Here is one example of how RE agents get taught the *basics* of contracts law: http://www.californiarealestatecourses.com/lawcourse/lesson9/L9S1N.htm

There may be more in the vast expanse of California law and regulations that could affect this, but in general a deal's a deal and RE agents tend to be "hungry". That's why we attorneys like to make sure that our clients get things in writing with enough detail to know useful things like how LONG the agreement lasts. Yes, I have seen RE agents try to enforce commission agreements after they were expired.

We love those expiration dates. They take the "handcuffs" off.

I hope this helps.

Thank you.

BAB.
Brent Blanchard
Category: Real Estate Law
Satisfied Customers: 1,975
Experience: Thirteen years of experience in real estate matters, HOA disputes and drafting HOA documents
Verified
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