A broker's claim to a commission after the listing expired
Advise a seller whether she owes a broker a commission on a sale made after the listing agreement ended. You have 60 minutes. To: Associate. Use the File and the Library only, then compare your draft with the rubric and the model answer below.
The assignment
To: Associate. From: Oswaldo Reyes, Partner. Re: Halloran, broker's demand. Our client, Nora Halloran, listed her house with Brightway Realty for 90 days and it did not sell. After the listing ended, she sold the house to a couple who had seen it during the listing period, and Brightway now demands a 6 percent commission. Please draft a plain-language letter explaining whether she owes it and what to do next. Use only the Library and do not guarantee an outcome.
File
Client interview
Ms. Halloran signed an exclusive listing with Brightway Realty on March 1 for 90 days at 6 percent. The listing expired May 30. In April, the agent showed the house to Ben and Lila Ortiz, who said they were interested but wanted to think about it, and they made no offer. In June, after the listing ended, the Ortizes contacted Ms. Halloran directly through a friend and bought the house for $410,000. She never re-listed with Brightway. The listing has a paragraph saying, 'If Owner sells to a buyer introduced by Broker within 60 days after expiration, Broker earns the commission, provided Broker gave Owner a written list of such buyers within 5 days after expiration.' Brightway did not send any list. The sale closed on July 20.
Brightway's letter
You sold to buyers we introduced. A 6 percent commission of $24,600 is due within 10 days.
Library
Real Estate Brokerage Act, section 19-208 (Franklin)
A broker may recover a commission only if the broker was licensed and the right to a commission arose under a written agreement signed by the seller. A commission agreement is enforced according to its terms. A provision that gives a broker a commission for sales made after expiration of the agreement to buyers procured by the broker is valid if the broker complies with any conditions stated in the agreement.
A broker sued for a commission on a sale after the listing expired. The listing said that the broker would earn a commission on a sale to any buyer the broker introduced within 90 days after expiration if the broker sent a written list within 10 days. The broker sent no list. Held: for the seller. A notice condition in the agreement must be satisfied to earn the tail commission, and a court will not excuse it because the buyer was in fact introduced by the broker.
A seller who dealt directly with a buyer after a listing expired argued that no commission was due. The agreement gave the broker a commission for buyers procured during the listing, but did not contain any condition. Held: for the broker, because the seller could not avoid a commission by delaying the deal until after expiration. The court distinguished agreements that expressly condition the tail commission on the broker's giving a list, and said such a condition controls when it is stated.
What graders look for in this task
Graders score a response against these criteria, and every one of them depends on using only the facts in the File and only the rules in the Library, so treat the list as a check for your draft after the first pass and again before you stop writing.
Writes in plain language addressed to Ms. Halloran
Explains that the commission depends on the written listing agreement
Identifies the tail provision: a buyer introduced by Brightway, sale within 60 days, and a written list within 5 days
Notes the sale closed July 20, which may be outside the 60 days after May 30, and that the contract date matters
Explains that Brightway sent no list and applies Whitlow that the condition must be met
Distinguishes Prescott because that agreement had no condition
Warns that the outcome depends on facts such as the contract date and the licensing of Brightway
Recommends a written response and asks for documents