Legal Question in Real Estate Law in California
Breach of Real Estate Contract
A real estate broker leases a million plus dollar building for a client. The client agrees to pay broker 5% of monthly lease income for next 30 years. The contract has a few clauses and breaches. One of which states, that if client sales or transfers property that broker gets remaining commission paid at time of sale. Additionally states that broker has exclusive rights to future leasing, and payment for those services. In preparing for sale, client requests brokers payoff demand which was to be paid at sale. The client sales an interest in property/business and collects $800,000 at which time he forms an LLC transfering title of said property to LLC in which he, and former tenants (Now owners) are all named. Clients attorney who wrote the original contact knowingly circumvents payoff demand and proceeds to close their transaction. Client and attorney now argue (after the fact) that NO commission is due, as it was not a sale. By all definitions, the title transfer, money exchanged, etc. define a sale, and breach to the original contract. My question in a nutshell is if goes to court, is there some hidden law that describes a sale or transfer differently that would prevent the broker from being paid his earned commission?
2 Answers from Attorneys
Re: Breach of Real Estate Contract
Broker should contact the attorney that Broker hired to review the contract prior to Broker's signing it.
Re: Breach of Real Estate Contract
No. There is not hidden law. Contract interpretation is a function of the court and the attorneys should be able to get a determination by the judge as to the meaning of the contract, subject, of course, to rights of appeal.
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