Legal Question in Real Estate Law in California

She has breached the contract but the question is whether it caused you any damages. You need to be able to show that the lender would have accepted the short sale offer. If the Uncle sells the property at or below the offer you presented, or if the lender put something in writing that the short sale amounts were acceptable to it, then you have proven you would have been entitled to whatever the contract provided as your commission.

You should write a letter/e-mail to the Uncle setting out the facts as yo know them to be and asking what he intends as to the commission to you, why he feels he is correct in taking part in the short sale [and why the lender might feel that the Uncle, especially if he is not collecting a commission would be trusted by the lender to get the highest offer since his nieces only concern is to get the property sold at whatever price will get it done quickly so is not really an arm's length agreement, but since you get more money as the price increases yo are more likely to get the highest possible offer], what arguments he has that you are not entitled to a full commission, what reasons are that that you should not sue and win as to the commission, etc. Is he a member of the same real estate organization you are? Is there any type of internal dispute resolution for that group? Do you have a clause that you are entitled to attorney fees if a breach occurs?

You getting a lien on the property by getting a court judgment is not going to help since she probably is judgment proof and it while you could impose it as a lien against the property it is inferior to the senior mortgage and would not be paid out of the sale proceeds. You would have to go against her assets. If the Uncle encouraged her to breach the contract then he could be sued for intentional or negligent interference with contractual advantage. You could try to get a quick Small Claims court judgment, but you are limited to $7,500 plus recoverable costs [which would include attorney's fees as an attorney can work on the case but just not appear in court to present the matter] and try to use that as a threat that the lender might back out of giving approval to the short sale, but I doubt that would be true.

You best bet is to write a strong letter to the Uncle and her arguing your points and stating the potential liability both have. A letter by an attorney will be stronger and might be worth the expense [probably about 2 hours of work total].

not proof read