Buyer and Seller of Huge Commercial Property Conspire Against Brokers' Entitlement to Commission
It’s a sad fact of life that in the business world, many times the wealthy, powerful individuals and/or corporations try to take advantage of basic, hardworking people and push them out of the way in business transactions to save themselves some money when possible. Such is the case here.
The two victims in this commission entitlement case are real estate brokers who have been involved in the real estate business in Palm Beach County since the early and mid-70’s, initially as salespersons and then subsequently as brokers. One of the principals involved is a very wealthy landowner who owned five sections of land (approximately 4,000 acres) free and clear between the Florida Turnpike and Okeechobee Boulevard. One of these real estate brokers had been working on selling this gentleman’s properties for years. He had an open listing to do so and had brought many offers to the owner on various sections over the years, including the property involved in this case.
This broker spoke with a second broker about the availability of these properties. This second broker felt that a large corporation she dealt with might be interested in some or all of the properties and sent correspondence that introduced the corporation to these properties.
Multiple meetings were held between the corporation and the second broker with the knowledge and permission of the landowner. These meetings took place over a three month period and it soon evolved that the corporation became interested in portions of the property.
During the next month, there were many discussions between this second broker, the large corporation and the landowner, culminating in the corporation issuing a letter to the broker instructing her to make an initial proposal regarding portions this property. As instructed, the broker brought this initial proposal to the landowner from the corporation.
As discussion continued between the broker, the corporation and the landowner, the landowner could determine that the deal was starting to heat up because the corporation had committed itself in writing on it’s stationery making this preliminary offer. At this point, he demanded, as owner, that he carry on the negotiations directly with the corporation and that the brokers take a passive role. The brokers were “frozen out”.