Listing Agreements and Procuring Cause

Posted on: July 9, 2012

A seller has the ability to limit a broker’s entitlement to a commission.  Unless a seller and a broker have a “special contract,” the broker is entitled to a commission if the broker is the procuring cause.  See Siegel v. Landquest, Inc., 761 So.2d 415, 416-17 (Fla. 5th DCA 2000). 

In order for the broker to be the procuring cause, the broker must bring the buyer and seller together.  Also, the buyer and seller must come to a meeting of the minds regarding the transfer of the property.

Courts use the procuring cause in cases where the seller and the broker have not negotiated their own terms regarding the broker’s commission.  The seller may negotiate the broker’s commission in a “special contract.”  Id.  The special contract is usually a listing agreement.

In the listing agreement, the seller may condition the broker’s commission upon the actual transfer of the property.  The seller may set a minimum sales price.  If the broker does not find a buyer who is ready, willing, and able to purchase the property for the sales price, or if the property is not actually transferred, then the broker will not be entitled to a commission.

If you have entered into a listing agreement or if you are currently operating without a listing agreement, call one of our South Florida real estate attorneys today at (954) 779-7009.