Which real estate agent is entitled to the commission?

Shire Legal acted for a client purchasing a property at Burraneer through a local real estate agent.  The client had first seen the property 12 months prior when he was not seriously in the market to purchase.  It was not until 12 months later that he was ready to buy, and at that stage, the vendor had briefed another agent to sell the property.

During the course of the conveyancing matter, the first agent contacted Shire Legal with a claim that our client was first introduced to the property via the first agent, and therefore the first agent was entitled to a cut of the commission.  We effectively refuted the first agent’s claims by establishing that the first agent was not the “effective cause” in our client’s purchase of the property.

The legal position is that a real estate agent is entitled to commission on the sale of a property if that agent is the “effective cause of the sale” of the property, whether during or after the period of exclusive or open agency.  Courts have taken the view that the real question is whether the actions of the agent really brought about the relationship of buyer and seller.

To avoid any possible disputes, it is imperative to include a special condition in the Contract by which the purchaser warrants that they were introduced to the property only by the agent noted on the front page.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s