Court Confirms Broker's Right To Commission Where Client Defaults Under Purchase Agreement


Buyers and sellers often try to avoid paying commissions if the underlying transaction does not close. In an opinion released September 4, 2008, the California Court of Appeal has confirmed that a real estate broker is entitled to recover his commission even if the underlying transaction does not close where the failure is based on a default by the broker’s client. Importantly, the Court held that the right to the commission was not affected by the fact that the other party in the transaction did not file a lawsuit or otherwise seek or receive a judicial determination of the client’s default.