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Current Developments in the Commercial Divisions of the
New York State Courts
Posted: June 1, 2017

Broker Entitled to Commission if Sellers Wrongfully Prevent Completion of Deal

On May 24, 2017, the Second Department issued a decision in CS Empire Realty, LLC v. Hussain, 2017 NY Slip Op. 04096, holding that a broker had a claim to a commission if the seller wrongfully prevented completion of the transaction, explaining:

Unless the parties have agreed otherwise, a real estate broker will be deemed to have earned his commission when he produces a purchaser who is not only ready and willing to purchase at the terms set by the seller, but able to do so as well. However, parties to a brokerage agreement are free to add whatever conditions they may wish to their agreement, including a condition that the contract of sale actually be consummated before the broker is deemed to have earned his commission. Where the broker and seller expressly provide that there shall be no right to a commission unless some additional condition is fulfilled, and the condition is not performed, the seller will nevertheless be liable if he is responsible for the failure to perform the condition.

Here, the Supreme Court properly concluded that, even considering the documentary submissions of the sellers, the broker has a cause of action to recover a broker’s commission on the ground that the sellers wrongfully or arbitrarily prevented the completion of the deal. Moreover, contrary to the sellers’ contention, the documentary evidence submitted in support of their motion did not utterly refute these allegations and thereby conclusively establish a defense as a matter of law.

(Internal quotations and citations omitted).

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