Shabbat Parashat Tetzaveh 5785

P'ninat Mishpat: Did the Real Estate Agent Remain Relevant?

Case: The plaintiff (=pl), a real estate agent, showed an apartment (=apt) to the defendant (=def), which he eventually bought for 3,950,000 NIS. At the time def signed the agent’s contract for apt, pl had exclusive marketing rights from the seller (=sel). After weeks of serious consideration, def refused to commit until an expert would see apt. In the meantime, sel rented it out to someone who made a condition that no buyers could enter apt for eight months. A few weeks after the eight months, def bought apt without informing pl. After pl found out, he demanded 2% of the sales price from def, per the contract. Def cites the following claims to exempt him from paying pl: Because pl was not forthcoming in doing her job, def brought in a different agent, whom he paid; the second one was the effective agent. Def signed with pl only because her exclusive status made it necessary. Also, pl had quoted a price of 3,850,000 NIS, so that due to the amount of time that went by and the different price, this was a new purchase, not covered by the old agreement (realtors’ exclusive status is limited by law to six months). The contract was signed without a price for apt, which pl inserted immorally after def’s purchase; this makes the contract non-binding. At the most, since pl did not finish the job (pl did not contact def after the eight months), she should get only partial payment.

Ruling: Def’s claim of pl’s ineffective work is rejected. Much of the complaints were about delay before seeing apt, which is when the contract was signed. Since def signed the contract after experiencing the “ineffectiveness,” these cannot be grounds. The delays reported afterward are unproven and/or inconsequential. Even sources that allow dismissing an ineffective agent (see Chatam Sofer to Choshen Mishpat 87:39) do so only after warning, and def did not claim to have given warning.

The passage of time and modest change in price are also not grounds for exemption. Neither the contract nor the law set a time limit from introduction to the property until the purchase. Only if so much time had gone by that the idea had been forgotten could we say that the agent was no longer the effective agent (see Igrot Moshe, CM I:49). In this case, the passage of time was on technical grounds (demands of the renter). The expiration of the exclusive status with sel does not impact on def’s obligations to pl. The change in price does not fundamentally alter the deal, as prices generally went up during this time. The (unproven) prospect of there not having been a list price, while a requirement for realtor contracts, would not undo pl’s rights since def admits he was informed about the realistic price range.

The claim that def employed a different agent is not impactful either. By contract, def was not allowed to bring in someone else without notifying pl. The contract also states that def would be fully obligated even if pl’s services were limited to the initial stage, which is often the case. While if pl had refused to do further work, she would have been in breach of contract, def did not ask her to do anything that she refused to do.

Therefore, def must pay pl in full.

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