Price Law Firm Win: Non-Brokers Not Entitled to Brokerage Fee
A Win for Licensed Real Estate Brokers
The Price Law Firm LLC prevailed today in an appeal before the Appellate Division, First Department that has affirmed an important principle of law – no non-broker can receive a commission for performing brokerage services in respect of the sale of real property. This principle of law exists to ensure that members of the public are only represented by licensed real estate brokers who are qualified to provide brokerage services.
The Appellate Division, First Department affirmed this principle in the case of Kucher v. Sohayegh, (1st Dept. April 30, 2020). The facts of Kucher v. Sohayegh saw the property manager of a building approach a real estate investor and attempt to facilitate a deal between the owner of the building and the investor. The owner and the investor began negotiating through counsel and arrived at a price much higher than the property manager had promised. The owner and investor completed the transaction.
The property manager then sued the investor for a “finder’s fee” claiming that he had been promised money in consideration of his introduction. The investor defended the lawsuit and moved for summary judgment arguing that the property manager was not a licensed broker and was not entitled to receive a fee. The trial court denied the motion for summary judgment claiming that there were questions of fact requiring a trial.
The investor appealed and the Appellate Division reversed holding that the investor was entitled to judgment as a matter of law. In ruling for the investor the Appellate Division ruled:
The record demonstrates that plaintiff, who is not a licensed real estate broker, may not recover for breach of contract pursuant to Real Property Law § 442-d because the subject property was the dominant feature of the transaction at issue. Plaintiff failed to raise a factual issue that the “Management Fee Agreement” that provided plaintiff with a “Management Fee” of $1 million is a finder’s fee or a fee for services facilitating the purchase and sale of that property.
Real estate brokers can rest assured that Real Property Law protects your license. The Price Law Firm is known for representing real estate brokers for the recovery of their earned broker fees. Contact us for a free consultation and we will endeavor to help you with any issues that arise in the field of real estate.
