How current events impact business & real estate

Sunday, January 15, 2012

Case of Interest - Douglas Elliman v. Tretter - Agency Disclosure

Summary: Appellate Division, 1st Department Case, discussing whether the absence of an agency disclosure from precludes a real estate agent from receiving her commission. The issue was side-stepped by the Court, which holds that a dual agency relationship didn't exist so we are left to speculate whether a commission could be earned if such a relationship had existed.

Advice: Get your agency disclosure forms signed on the first point of substantive contact because the question remains open whether you can collect a commission if you fail to get the disclosure completed. Additionally, its required by real estate license law to get an agency disclosure form completed; so to keep your license in good standing, you must get this done.

Case Analysis:

Issue: Did real estate agent act as a dual agent and consequently was she required to disclose her divided loyalties and obtain the sellers' consent thereto on an agency disclosure form?

Claim: Real estate brokerage sought $70K brokerage commission.

Facts: Tretters, Mr. Tretter being an attorney, retained Douglas Elliman to sell their cooperative apartment. Douglas Elliman's agent, Lockwood, met prospective purchaser Zeitzer at an open house and showed approximately 5 other apartments to Zeitzer, her "customers". Zeitzer contracted to purchase Tretter's property. Contract price was $1.4 million with a 5% commission to the brokerage company. Sellers were solely responsible for the brokerage commission pursuant to the contract.

Finding of Fact: Lockwood did not act as a dual agent. While she had a signed exclusive agency agreement with the Tretters, she did not with the purchasers and she received no monies from them.

Dissent: There is an issue of fact whether Lockwood was a dual agent because Lockwood acknowledged in depositions that the was the "buyers' agent" among other facts such as their attorney referring to her as a dual agent.

As the Department of State says: Be Wary of Dual Agency

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