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Brokers who deal with commercial properties are increasingly being denied their duly earned commissions. Given the multi-million dollar transactions that are often involved in the world of commercial real estate in an area like New York City, these commissions can be considerable and worth fighting over.
Many of the commission disputes involve the following facts: 1) the broker claiming the commission has no exclusive agreement: 2) he or she has introduced the buyer or renter to the property; and 3) the owner or seller has never discussed commission terms. This common scenario results from the fact that brokerage agreements can be, and often are, oral. Hence, there are no term sheets spelling out the commission percentage.
Therefore, while each particular controversy will turn on its specific facts, there are certain basis principles and strategies that can be gleaned from a review of the case law that can help brokers protect their rights to a commission. This article uses New York State law as an example.
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