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Coldwell Banker Real Estate Services, Inc. v. Maimone

A-2888-02T5 (N.J. Super. App. Div. 2004) (Unpublished)

BROKERS; COMMISSIONS; DIVORCE—Even though a divorcing couple’s house is listed for sale with a real estate broker, if a court orders the house to be transferred from one spouse to the other, the broker is not entitled to receive its commission.

A couple in the midst of their divorce was ordered to list their former home for sale with a real estate broker. The house went unsold. Therefore, the court repeatedly ordered reductions in the listing price in order to facilitate the sale. Eventually, the final judgment of divorce required the property to be relisted with the broker at a yet, lower price with further reductions if recommended by the broker. Also, further reductions could be made with the consent of both parties.

A few months later, the court amended the divorce judgment, directing the ex-wife to transfer her interest in the property to her ex-husband. Upon learning of this order, the broker offered to reduce its sale commission, and sued for its payment contending it was due upon transfer of the house to the ex-husband. The ex-husband and wife contended that payment was not warranted because the broker had not earned a commission, and therefore moved to dismiss the broker’s complaint with prejudice.

Applying prior case law to the facts of this case, the Court held that no sale of the house had taken place and, consequently, the broker did not earn a sales commission. Prior case law states that a broker earns its commission when “(a) he produces a purchaser ready, willing and able to buy on the terms fixed by the owner, (b) the purchaser enters into a binding contract with the owner to do so, and (c) the purchaser completes the transaction by closing the title in accordance with the provisions of the contract.” Here, the Court held that the broker failed to produce a buyer who was ready, willing, and able to perform. The transfer of the ex-wife’s interest was not a sale. It was a transfer of an interest from one title owner to the other.

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