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City of Jersey City v. Liberty Storage, LLC

A-4111-09T2 (N.J. Super. App. Div. 2011) (Unpublished)

BROKERS; COMMISSIONS — Even though a real estate broker is claiming a commission from a buyer on a sale made to a condemning authority, the broker does not have the right to intervene in the condemnation action where its commission claim does not have a question of law or fact in common with the condemnation action.

A property owner entered into an open listing realty agreement with a real estate broker. It set a 5% commission if the broker found a ready, willing, and able purchaser. The agreement authorized the broker to submit and pursue the interests of the governing municipality as a purchaser. It also had a non-exclusivity clause permitting the owner to find its own purchaser and list the property with other brokers.

The municipality told the owner of the its plan to acquire the property under the Eminent Domain Act. The broker, asserting that it had secured the municipality as a ready, willing and able buyer, objected to the owner’s dealings with the municipality. The owner ultimately offered to sell the property to the municipality for a given price with additional terms. Then, the owner asserted that despite extended negotiations, the municipality refused to accept those terms, which included provisions for environmental remediation costs and relocation costs. The municipality filed a declaration of taking for the property, setting its opinion as to a just compensation figure. The lower court permitted the municipality to take title to the property pursuant to the Act. It denied the broker’s motion to intervene, holding that such a claim was not germane to the condemnation action, but could be brought in a separate suit against the property owner for a broker’s fee.

The broker appealed, but the Appellate Division affirmed, finding the broker was not entitled to intervene as of right, as the broker had not proven that disposition of the condemnation action would practically impair or impede its ability to protect its interest in being paid a commission fee. The broker failed to allege that the condemnation proceeds and the owner’s other assets were insufficient to satisfy a possible judgment. The Court likewise held that the lower court did not mistakenly exercise its discretion in denying the broker’s permissive intervention in the condemnation action, as its commission claim did not have a question of law or fact in common with the condemnation action. Specifically, the commission issue had nothing to do with adjudicating the fair market value of the property in accordance with the Act.

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