The information you obtain at this site is not, nor is it intended to be, legal advice.  
You should consult an attorney for advice regarding your individual situation.  
Contacting an attorney does not create an attorney-client relationship.  Do not send,
e-mail, or provide confidential information or information you do not wish to be
publicly disseminated until such time as an attorney-client relationship has been
established and requested to do so by an attorney.

Copyright 2009 Law Office of Craig W. Little, P.A.  All rights reserved. You may
reproduce portions of this site or materials available at this site for personal and
non-commercial use.  All copies of portions of this site or materials available at this
site must include this copyright statement.
Web Articles
                  Analysis of Real Estate Broker's
                     Procuring Cause Doctrine

A real estate broker does not necessarily have to enter into a
listing agreement with the buyer or seller for the broker to have
earned a commission on the sale of real estate.  A well drafted
listing agreement is certainly preferable with the rights of each
party being clearly described and the amount of the commission
or the manner for calculating the commission being expressly
defined.  But if the broker does not secure a listing agreement
or if the listing agreement has expired, then the Florida real
estate broker may still be entitled to a commission if the buyer
and the seller consummate a sale of the property.

Long standing Florida legal precedence states that if a real
estate broker has brought the parties together and a sale
results from the continuous negotiations between buyer and
seller that were inaugurated by the broker then the broker is the
procuring cause for the transaction and, therefore, entitled to a
commission.  

The first requirement is that the real estate broker must have
brought the buyer and the seller together

The broker showing the buyer the property or introducing the
parties are examples where the requirement of bringing the
parties together has clearly been satisfied.  But Florida courts
have adopted a rather broad interpretation of this requirement
so that often any actions by the broker that lead the buyer and
seller to one another will be found to have satisfied this
requirement.  For example the Courts have found that the
broker brought the parties together when the broker advertised
a parcel of property for sale and the ultimate purchaser of the
property saw the advertisement and when they realized they
were friends with the seller, the buyer and the seller negotiated
the deal directly and eventually closed the purchase and sale.  
In this case the broker was found to have brought the buyer and
seller together and was awarded a commission for the sale of
the property.

Florida Courts will even look, in practical terms, at the buyer and
seller or even beyond to the principals behind the buyer to find
that the real estate broker brought the parties together and
therefore was the procuring cause of the transaction.  The
Courts have found that the broker brought the buyer and seller
together and was the procuring cause when the potential buyer
that had been shown the property by the broker later formed a
joint venture with another individual and acquired the property
in the name of the joint venture.  The Courts found that the
broker did not literally bring the seller and the joint venture
together because the joint venture had not existed nor been
previously contemplated, but the broker did show the property
to one of the principals behind the joint venture and therefore
the Court reasoned that in practical terms, the broker had
brought the buyer and seller together and therefore was the
procuring cause of the transaction.

However simply bringing the parties together is not enough.  
The second requirement is that the real estate broker must be
the impetus for continuing negotiations between the parties.  
The Supreme Court of Florida stated that the broker must be
involved in continuous negotiations between the prospective
buyer and the seller for the broker to be the procuring cause for
the transaction.

Therefore, as has been noted by other Florida Courts, if a real
estate broker abandons their attempts to bring the parties
together then they will not be the procuring cause of a
transaction between the parties.  If the parties later consummate
a transaction, without the assistance of the broker, then the
broker, in such a case, is not entitled to a commission.

But if the buyer and seller intentionally exclude the real estate
broker from the continuing negotiations of the parties then the
broker can still be found to be the procuring cause for the
transaction.  The broker should not be penalized for being
excluded from the transaction by the parties if the broker
otherwise qualifies as the procuring cause for the transaction.  If
the buyer and the seller intentionally exclude the broker this
negates the requirement that the real estate broker be
continually involved in the negotiations between the potential
buyer and the seller.  Thus if the broker has been intentionally
excluded from the negotiations, Florida Courts have found that
they have done all that is necessary and all that they were
permitted to do by the parties, to bring the transaction to a
successful conclusion, and therefore they are entitled to a
commission.

The buyer and seller have been found to have excluded the
broker from a transaction if the broker brings the seller initial
offers from the buyer and the seller rejects those offers or if the
potential buyer expressed no interest in the property once it was
shown to them by the broker.  In such cases, it has been found
that the broker is not expected to make any further efforts.  
Therefore if the buyer and seller later commence negotiations
and close the purchase and sale without informing the broker,
then they have intentionally excluded the broker from the
transaction and the broker is entitled to a commission.

The exclusion of the real estate broker from the continuing
negotiations by the buyer and seller must only be intentional for
the broker to have earned a commission upon the closing of the
sale.  The motivation of the buyer and seller is not examined
and it is not necessary to show that the buyer and seller
excluded the broker with the intention of defrauding the broker
or for malicious purposes.  It simply must be shown that the
buyer and seller intentionally excluded the broker.

But the exclusion of the broker must be intentional.  If buyer and
seller unintentionally exclude the broker from the continuing
negotiations then the broker is not entitled to a commission.

Florida Courts recognize that without practical protections for
real estate brokers, after a broker has provided their services
by identifying a buyer for the seller’s property or showing
property to the buyer, the broker’s claim for a commission could
be easily defeated by collusion between the buyer and the
seller.  Therefore Florida Courts have established and broadly
construed the principle that if the real estate broker was the
procuring cause of a real estate transaction that closed, then
even absent a valid and enforceable listing agreement or
commission agreement, the broker is still entitled to a sales
commission.

                                                                    Return to Index of Web Articles
Law Office of
Craig W. Little, P.A.