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Stappas v. Rose

A-956-02T2 (N.J. Super. App. Div. 2003) (Unpublished)

BROKERS; COMMISSIONS—Commission agreements with business brokers must comply with the strict business broker statute of frauds and for such a broker to earn a commission on the real estate portion of a transaction, the business broker must also be a licensed real estate broker.

A business broker sued for a commission on the sale of a business on property owned by an estate. Eventually, the property was sold and the estate denied that it owed any commission to the business broker. The broker did get a fee for independently assisting with the placement of a mortgage. The Court ignored all of the agreements and alleged agreements between the seller and the business broker. Instead, it ruled that the business broker was not entitled to “earn a commission on the sale of the real estate because he [was] not a licensed real estate broker. ... Also, although the sale of the real estate may be incidental to the sale of the business, an unlicensed real estate broker cannot recover on the real estate portion of a sale, but only on the personality portion.” Further, “[s]trict compliance with the business broker statute of frauds is required in order for a broker to receive a commission.” Although the broker may have assisted the eventual buyer in obtaining financing to purchase both the business and the real property on which the business was located, “he did not obtain an additional agreement with [the seller] as contemplated in” previous writings. Therefore, he was not entitled to a commission on the sale.


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