Legal Question in Real Estate Law in California

Re: buyer broker contract

I agree with Mr. Whipple, but I must add that the answer to your question is "it depends." One of the fundamental policies in my office is that I do not like to discuss the terms of a written agreement unless the written agreement is in front of me. People frequently tell me the written agreement states one thing, and then when I read it, it usually states something altogether different.

The issue in your case is whether the buyer's broker has a right to compensation when you chose another broker. This usually happens in situations involving a listing broker, but the rules are similar. A broker's right to compensation arises, if at all, only from the buyer-broker agreement, which is strictly enforced according to its terms. (Colbaugh v. Hartline (1994) 29 Cal.App.4th 1516, 1524.)

The brokerage agreement must be in writing to comport with the Statute of Frauds. (Civ. Code sec. 1624 subd. (a)(4).)

Some agreements provide for the specific amount of the commission. (No 6% is not the law, you can negotiate the rate.) If the agreement does not provide for the specific amount of compensation, the broker will be deemed entitled to a "reasonable" commission. (Beazell v. Schrader (1963) 59 Cal.2d 577, 580.)

I have seen some brokerage agreements that have a sunset period. The law in this area is very tricky. You should get a legible copy of the brokerage agreement to a knowledgeable attorney with the key facts of what happened for a definitive answer.

Re: buyer broker contract

Probably. In court, you will be held to the letter of the contract you signed, unless there was a breach on the agent's part that was sufficiently material to justify your terminating. That the agent was less informed and competent than you hoped is probably not sufficient. I'm not suggesting that you shouldn't put up a defense against the likely lawsuit; just that your chances of winning on the defenses you propose are not real good, in my humble opinion.