Review what rights you as the broker have before executing the Termination and Release
If your real estate listing document or the purchase agreement authorizes you to receive a commission where you are the procurring cause WHETHER the sale consumates or not and one of the parties decides to cancel a sale, you are faced with the decision of whether to pursue the commission or not. A recent ruling by the Court of Appeals, Reynolds Properties, Inc. v. Bickelmann, (10/15/09) indicates that the decision needs to be made BEFORE executing the termination and release documents as the language in many of those forms terminates the purchase agreement in its entirety INCLUDING the language typically relied upon by the the broker to go after the commission it otherwise may have had a right to under the purchase agreement.
Review what is being released by the Termination and Release Document
As always, you also have the practical consideration of whether you want the dispute with your the party but in making this decision, the scope of the release should be reviewed to determine whether it terminates buyer's obligation to close and seller to sell or whether it terminates the entire contract. Your right to collect a commission under the breached agreement provision of the purchase contract is ALSO terminated if the release is a complete termination and release.
If you determine to go after the commission
You should have the Termination and Release Document you are planning on using reviewed to ensure that it specifically carves out your right to go after the commission from the defaulting party. The standard language used in most GAR documents effects a complete release and, under the holding of the Court, would preclude such a claim.
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