Jersey Cape Realty, Inc. v. Wills

A-1056-98T3 (N.J. Super. App. Div. 1999) (Unpublished)
  • Opinion Date: July 23, 1999

BROKERS; COMMISSIONS—Even though a seller may rightfully terminate a contract during the attorney review period, it still may be liable for a brokerage commission if the buyer was ready, willing, and able.

A property owner entered into a listing agreement with a broker to sell a vacant lot for $210,000. The listing agreement expired on July 15, 1997. On July 14, 1997, a $210,000 offer was presented to the property owner. On the same day, another offer for $212,000 was forwarded by the broker to the property owner by overnight mail. The property owner claimed that it did not receive that offer until July 16. On July 17, the property owner advised the broker that it was not interested in selling the property and could not accept either offer. The broker sued for its commission. The lower court found that there was no showing of a ready, willing, and able buyer. Moreover, according to the lower court, the existence of the three-day attorney review period for real estate contracts prepared by brokers, in which either buyer or seller has the right to reject the proffered contract for any reason, doomed the broker’s cause of action. The Appellate Division reversed that decision, holding that although the three day recission period gives either buyer or seller the right to reject the contract, it does not govern the rights or obligations undertaken by a broker and seller when they execute a listing agreement for the sale of real property. When a broker has produced a buyer willing and financially able to buy on the seller’s term and there is a failure of contract due to the seller’s fault, such as when it changes its mind, the seller is liable to the broker for the commission. Because the record contained no more than a bare assertion that both buyers were financially able, the matter was remanded to allow the broker to present evidential material to support that allegation.