Customer (name blocked for privacy):
Without knowing the state, and understanding this is on the verge of needing immediate action and I am not giving specific legal advice, I will give some general advice:
Negotiate the percentage.
- Yes. You can bring it to Court. You need an attorney specializing in Real Estate law - call your local bar and ask for a referral.
- Maybe. This is a tough call. The evidence you have shows a course of dealing and agreement - so, it is evidence of the intent of the parties to be bound. BUT, this is a land contract at issue. In some cases the rule is that nothing outside of a writing within the four corners of the document is admissible or that the transaction is subject to what is called the statute of frauds again requiring a writing. One could argue your business transaction is merely a finder's fee and not subject to the strict writing rule. It is arguable.
- Winning is relative. Can you get 1.25 % of the deal now without expending any more effort or cost? Is that a win? Would 7% after deducting attorney's fees, time, cost and the loss of the other contract be a win? Would the impact on your reputation, future business, etcetera, once people know you sued a client be a win? These are business considerations. Every legal case involves principal and principle - same word in sound - but, two meanings. Principal is money. Principle is an idea or right. It is up to you to determine what you want in winning: principle or principal. On principle - you are right, you are being nickle and dimed unfairly in a handshake deal. On principal - well, you need to run the numbers.
- I doubt a title or closing company is going to be comfortable closing without that nice line on the settlement papers regarding commisions being fully completed and agreed upon.
- Can they still close if you file suit? Yes. You would neet to get an injunction or restraining order - these require a bond to secure without a hearing and you would need a local attorney now in order to accomplish this. Now, the suit over a commision may make the title company and escrow agent refuse to close the deal out of fear of screwing up.
But, be warned. If you disrupt the down river deal and it cause damage to your client - you may be the one facing suit. So, I would be cautious about disrupting the deal. You could bring an after-the-fact suit for the breach of agreement.
Are you a member of a real estate organization that has an ethics requirement? Are you allowed ethically to hold up the deal over a fee dispute? Is there a mediation or arbitration program you could put the dispute with the client in?
I think you see some of the weaknesses in your case. These are considerations. Oral agreements with supporting documentation can be enforceable and the "standard" % would also be evidence. This is a very close call and if you can use your skills to get her up to the 3% on the closing date -and, included in the closing documents - this may be you best option. Push for the 3%... but, consider less keeping in mind that most civil business litigation takes one year to two to get to trial.
Now, there may be some specific state laws covering commision sales that may change a bit of this analysis. Check with local trade organizations and your state board of realtors.
This is complicated, somewhat urgent and I would encourage you to call your local bar association for a referral to a real estate lawyer locally - most bars have a referral program that provides a free or low cost initial consultation.
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Disclaimer: This answer is informational in nature and is not a substitute for hiring an attorney. No attorney-client relationship is formed by this answer.
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