Legal Question in Real Estate Law in Maryland
commission in property exchanges
I am a broker, and have a property listed for sale. Another broker called me, inquiring about the possibility of his client trading or exchanging his property for my client's property.
I drew up a contract of sale, with the deposit being listed as the trade-in property.
In the contract, I noted that I and the 2nd broker were to receive a commission from each party, and split the total commission 50-50. The 2nd party refuses to pay commission. How should this be worded in a contract to protect myself?
1 Answer from Attorneys
Re: commission in property exchanges
It may be that the statement in your contract is sufficient. You need to establish the 2nd party's consent to pay you the commission. You would then bring an action against the 2nd party as a third party beneficiary of the contract. In the future, I would place an initial line next to the commission paragraph to demonstrate that the party was aware of the commission obligation he/she was agreeing to pay. The fact that is it an exchange contract should not make any difference - your commission would be based upon the sale value established between the parties.
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