Court Decisions Favor Realtors
In the news this week are two California court cases in which a real estate broker received due compensation under the California Association of Realtors buyer/broker agreement and the other case in which an attorney was penalized for asserting frivolous accusations against a broker.
Schaffter versus Creative Capital Leasing Group is the first case. In this case, the buyer in 2002 signed a CAR buyer broker agreement in which the buyer agreed to compensate the broker for contracts for the purchase of 16 new units in condo developments. The buyer closed on eight of the transactions, however, went into default on the other eight contracts. The broker was not given his compensation when the buyer and seller agreed to return the deposits back to the buyer except for $1,000.
The broker sued the buyer for all unpaid compensation for all of the 16 transactions. In this case, CAR submitted an amicus curiae or “friend of the court” briefs to support the broker’s position in the case. The buyer on the other hand used the agreement he had with the seller to prove his case explaining the transaction to default on eight of the contracts was done between buyer and seller, thus no compensation was due the broker. The court, however, disagreed with the buyer and agreed with the CAR agreement and stated, “As CAR explains in its amicus brief, the ‘default’ provision of the Buyer Broker Contract recognizes that when a buyer defaults under a purchase agreement, it would not be fair to deny the broker the right to be paid for services rendered under the Buyer Broker Contract. “The seller’s post-default conduct is, of course, immaterial to determining whether the buyer defaulted.” The court awarded the broker the compensation for all 16 contracts along with all attorney and court costs.
The next case was Fields versus Sycamore Ventures. This court case centered on a buyer that after buying a new home found mold and leaky pipes. The buyer upon finding this discovery filed a lawsuit against the broker with 18 legal claims. The majority of the claims against the broker such as breach of warranty, nuisance, and trespass were without merit. The court agreed the claims were unwarranted and awarded the broker $13,500. The court will send their decision to the State Bar of California to decide if disciplinary actions are warranted against the attorney for the buyer, Miller Law.