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Gebroe Hammer Associates Investment Real Estate v. Gangemi

A-1947-02T2 (N.J. Super. App. Div. 2004) (Unpublished)

BROKERS; COMMISSIONS—An exclusive listing agreement means that a commission is payable if the listed property is sold to any non-excepted buyer during the period covered by the agreement.

A broker entered into an exclusive listing agreement with a property owner for the sale of five properties as a package. The agreement carved out, as an exception, the sale of any of the properties to two particular individuals. In the event the properties were sold to those individuals, the broker was not entitled to a commission. Because of difficulty in selling the five property package, the brokerage agreement was modified several times, changing the requirements to sell five properties to a requirement to sell three properties, and removing the carve-out.

The broker procured a buyer for one of the properties, and then obtained an offer for the other two. The seller then decided to sell the two properties to the two individuals originally excepted from the exclusive listing. The broker sued for its commission and prevailed at trial. The owner appealed, claiming that the broker was not entitled to a commission. He claimed that the broker failed to meet the necessary requirements to be entitled to a commission because the broker did not prove it had produced a ready, willing, and able buyer because no contract was signed. It also claimed that the broker was not entitled to a commission because the broker did not point out that the revised agreement had omitted the “carve-out” for the two individuals who ultimately bought the properties. Lastly, it claimed that the broker was not the efficient procuring case of the sale to the two individuals.

The Appellate Division found in favor of the broker. A listing agreement can provide that the seller is liable to pay the broker a commission if the property is sold to any non-excepted buyer during the term of the listing or is sold after the listing period expired to a buyer generated by the broker before the expiration of the listing period. In this case, the properties were sold before the end of the exclusive listing period, and the listing agreement did not carve out exceptions for the sale of properties to the two individuals.


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