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Brokerage Commission - Earned at Execution
of Contract or Upon Closing?
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October 26, 2009
Previously published on October 20, 2009
Another recent California Court of Appeal decision underscores the need for careful drafting of real estate contract documents. In RC Royal Development and Realty Corporation v. Standard Pacific Corporation, 2009 Cal. App. LEXIS 1606 (September 29, 2009), the buyer ("Standard Pacific") was held liable for payment of a commission to its broker ("RC Royal") based upon its agency agreement with its RC Royal notwithstanding that Standard had justifiably terminated the purchase agreement. The court determined that the contract, as drafted, did not condition payment of the brokerage commission upon closing but instead was deemed earned upon execution of the purchase agreement.
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The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance. |
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