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   The purpose is to answer frequently asked or unusual questions. Topics will range from real estate, business, litigation and trusts and estates. Your feedback is appreciated. Direct your comments to Cherisse Roy at croy@scott-harris.com

EXCLUSIVE BUYER BROKERAGE AGREEMENTS

-By John M. Jorgensen, Esq.

  A contract not often used by realtors is the exclusive buyer brokerage agreement prepared by the Florida Association of Relators. The agreement provides that a real estate broker be given the exclusive right to work with and assist a buyer in locating and negotiating the purchase of real property. A broker should consider using the agreement in situations where a broker anticipates investing a substantial amount of time with a buyer looking for property.

  The agreement is enforceable. I recently arbitrated a case were the buyer was found liable for breach of the exclusive buyer brokerage agreement, and had to pay a commission to the broker even though the broker was not the procuring cause of sale.

  In this case, the buyer's breach consisted of contacting and using another broker in violation of the exclusivity requirements of the agreement. In particular, the agreement provides that all inquiries of any kind from real estate licensees or property owners be directed to the exclusive broker. The agreement also provides that if the buyer is contacted by another real estate broker or seller, the buyer must immediately advise the broker or seller that he is represented exclusively by the broker.

  In the case in question, the exclusive real estate broker had worked with the buyer for many months, and had shown the buyer several properties in a certain upscale waterfront neighborhood. The buyer had expressed interest in several properties but had not gone to contract on any of them. At this point in the search, the buyer, without informing the exclusive broker, contacted another real estate broker, who went to the same neighborhood and showed another property literally across the street from properties previously shown the buyer. The buyer quickly entered into a contract and closed the transaction. The exclusive broker notified both the buyer and the new broker of its rights under the exclusive buyer brokerage agreement, but the new broker refused to share in the commission. At the closing, a full commission was split between the listing agent and the new broker.

  The testimony at arbitration revealed that the buyer disclosed to the new broker that he had signed some type of documentation with the exclusive broker. Nevertheless, the new broker failed to contact the exclusive broker to determine exactly what document had been signed, and to attempt to negotiate a split of the commission. Clearly, the new broker had an obligation to contact the exclusive broker in this situation and this was undoubtedly one of the grounds for the arbitrator's ruling. It was also a basis for the amount of damages awarded the exclusive broker, which was equal to one-half of the split of commission that the new broker earned in the sale. Given the facts of the situation, it is quite possible that the buyer could seek recourse against the new broker to recoup the damages that he must pay to the exclusive broker.

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