Procuring Cause & Commission Disputes
Commission disputes often boil down to what is referred to in the industry as "procuring cause." The agent who ultimately caused the buyer to purchase the home and earned the commission is generally the procuring cause agent. Although a common misconception, agency relationships do not determine whether or not a party is entitled to compensation. Agency is a separate issue. The issue is whether or not there is an enforceable agreement for compensation between either: (a) the cooperating broker and the listing broker that would entitle the cooperating broker to recover a portion of the commission from the listing broker, or (b) whether the cooperating broker has an enforceable right to recover compensation from either the owner or buyer directly based on contract principles that require a written agreement in that event.
We represent real estate agents and brokers in procuring cause and commission dispute actions with other brokers, buyers and sellers. With our office in Davis, we represent brokerages, real estate agents and other real estate professionals in Yolo County, Solano County, Sacramento County, and statewide throughout California. For more information, call our office today at (530) 231-4949.
If you are an agent, here are some helpful tips to avoid procuring cause disputes:
Instruct your clients to inform other agents they speak with that they are working with another agent
Sign a Buyer Representation Agreement with your client
Sign an agency disclosure
Instruct your clients to refrain from submitting Zillow property inquiries and directly calling listing agents for information
Do not let your clients tour property with other agents
Establish an open house protocol with your client; ask that they hand the open house attendant your business card and sign the guest book with your name next to theirs
If you are in need of legal representation to analyze your commission dispute, assert a claim for commissions, or defend a claim of procuring cause, contact us to discuss your case. We can persuasively outline your legal position to your opponent and hopefully keep them from pursuing the matter. If forced to mediate, arbitrate or litigate your claim, we will advocate on your behalf and frame your legal position in the best possible light.