Dennis Norman
Last month the Missouri Court of Appeals handed down a decision on a case that caught my attention. The case, Deer Run Properties, L.L.C. vs. Keys To The Lake Lodging, Co. L.L.C., stemmed from the sale of some condominiums and involved a commission claim by a buyers agent.
According to the court records, Deer Run Properties (Seller) owned some condominiums that they listed for sale with a real estate broker. The real estate broker put the property in the local MLS and made the typical unilateral offer of compensation to selling agents. Sometime later a buyer purchased several condominiums from the seller and, at about the same time, Keys to the Lake Lodging Co LLC (Appellant) recorder a broker’s lien notice. The seller filed suit against Lake Lodging to have the lien notice removed and Lake Lodging filed a counterclaim alleging that they had introduced the buyers to the property and were the procuring cause of the sale, entitling them to a commission as well as to file a broker’s lien.
The seller (Deer Run) in response to the counterclaim said the record conclusively proved the appellant (Keys to the Lake) was not the procuring cause and had no contract with Seller. Based upon the facts, the court decided in favor of the seller and dismissed Keys to the Lake Lodging Co LLC’s commission claim against the seller.
Keys to the Lake Lodging Co appealed the case to the Missouri Court of Appeals which, in their decision last month, agreed with the lower court. The Appellant Court stated “in the absence of a contract of employment between the broker and the owner, the owner is not obligated to pay a commission even if the broker was the efficient cause of the sale.” So, “no ticky, no laundry” to put it bluntly.
Keys to the Lake had tried to convince the court that they had a contractural relationship with the seller, through the listing brokers listing agreement and offer of sub-agency, but the court didn’t buy it and said there was no case law to support such a claim, but plenty to support the sellers argument. The court went on to say that the only agreement for compensation to Keys to the Lake was from the listing broker’s offer of compensation so any claim to compensation would have to go against the listing broker, not the seller.
Granted, this case is in Missouri and was tried under Missouri laws, however the court cited cases in New York and Arkansas that were consistent with their position, so there may be many more states with similar laws as well.
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