113 The usual term of reference is that of the contract between the seller and

113 the usual term of reference is that of the

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113 The usual term of reference is that of the contract between the seller and the broker, commonly known as an authorization to sell. In either case, it is an employment (service) contract and has nothing to do with the actual transfer of real property. Under this contract, the broker is an agent of the principal and is bound by the law of agency. He has certain obligations to his principal. Because the listing is a service (employment) contract, it is non-assignable and is canceled by the death of either party. 115 In case law, the state has asked a question that seems to differ with the principle that, “Any person signing a listing with a broker obligates himself to pay a commission if the broker performs, even though that person cannot or will not deliver the property.” This may shock some students. If the contract calls for a forfeiture of the deposit to the seller and the seller accepts the forfeiture and releases the buyer, the broker has, by legal authority, not produced a buyer “ready, willing, and able” to buy and cannot force the seller to provide any part of the forfeited deposit. On the other hand, if the seller refused the forfeiture and sued for specific performance, the broker would be due the commission because the buyer was forced to buy. In either case, the broker does not have the right to bring an action in court on behalf of his principal. 115a If only one spouse signs a listing on community property and the broker performs, that spouse has obligated the community funds to pay the commission even though the other spouse refuses to accept the offer and the property cannot be delivered. The prudent broker will secure the signatures of both spouses when dealing with community property. 116 This would be true also where one party in a joint tenancy or tenancy-in-common signs a listing on the entire property. All parties to the tenancy must join in the sale and if one refuses to do so, the property cannot be sold. A co- tenant may sell his interest in the property, but not the entire holding without the consent of all parties. However, the party signing the listing may be held for the commission due the broker. 119 California now requires that any printed form or agreement which is intended to establish a right to compensation must contain this statement in not less than 10 point boldface type immediately preceding any provision of such agreement relating to compensation of the licensee. Notice: The amount or rate of real estate commissions is not fixed by law. They are set by each broker individually and may be negotiable between the seller and the broker.
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