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Weichert Commercial Brokerage, Inc. v. United States Land Resources, L.P.

A-3269-00T2 (N.J. Super. App. Div. 2002) (Unpublished)

BROKERS; AGREEMENTS—Payment schedules negotiated to deal with an owner’s delinquency in paying commissions are amendments to the original brokerage agreement and the terms of the original agreement, such as those calling for interest and attorneys fees, still apply.

A property owner was obligated, by agreement, to pay a substantial leasing commission. That same agreement provided that upon default, the property owner would pay “all reasonable legal fees, court costs and collection fees incurred by [the broker] ... plus interest on the outstanding balance” at the rate of fifteen percent per year. When the property owner became delinquent in paying commissions, it reach agreement on an installment payment schedule, but failed to abide by that arrangement. It then agreed, in writing, to another installment payment schedule, but, again, failed to meet its obligation. The broker sued for the remaining commission and was awarded legal fees, costs, and interest. The property owner objected to the award of attorney’s fees, costs, and interest arguing that the two payment schedules replaced the original agreement and they did not provide for such charges. The lower court, with the Appellate Division’s approval, found that the installment payment agreements were amendments to the original commission agreement and merely relaxed the payment schedule. According to the Court, the amendments did not supercede the broker’s entitlement to interest in the event of a default, but were merely accommodations by the broker to the property owner in an attempt to collect the outstanding commissions. Further, especially between sophisticated entities, “[d]efault interest rates, like late fees, are presumed reasonable.”

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