Brokers: Get Your Commission Agreements in Writing!

Last month’s decision in Westside Estate Agency, Inc. v. Randall (Cal. Ct. App. – Dec. 1, 2016) began its opinion saying:

“We are all familiar with the phrase, “caveat emptor”: Buyer beware. This case deals with its less renowned cousin, “caveat sectorem”: Broker beware.”

Section 1624 of the Civil Code says that a real estate broker can only be a broker for someone — e.g., get a commission — if there’s an agreement in writing.  The broker here didn’t get a signed agreement authorizing his status as a broker, but instead relied upon an alleged oral agreement.

That’s not good enough.

Which means he loses out on a $925,000 commission on a $45 million sale.

Follow the statute.  Get the agreement in writing.

h/t Prof. Shaun Martin