Getting Paid When Purchase Options Are Exercised 

One of the most difficult tasks for a real estate agent may be the successful collection of a commission due upon the renewal or an extension of a lease. Listing agreements will often state that not only is the agent's

Down in the Dumps over Prior Use and Condition 

Commercial real estate transactions often involve complex issues of prior use and condition. Occasionally, owners or real estate agents say that a property is in a certain condition—a statement that turns out to be in error. But what liability, if

Evidence of Insurance Ensures Fewer Problems 

One of the most important provisions of a commercial lease—and occasionally one of the most overlooked—is the provision requiring the tenant to carry insurance. This could be liability insurance, fire insurance, or a combination, but it is a vital part

Employee or Independent Contractor? 

For many years, it has not been clear if salespeople working in real estate offices are employees or independent contractors. The distinction has considerable implications for all concerned. An employer is required to withhold money from paychecks for such things

Collecting Commissions When Exclusive Agreements Are Breached 

What happens when a property owner attempts to circumvent paying a commission to a broker, particularly in the face of an exclusive listing agreement? A Superior Court decision in New Jersey in 1986, Kislak Co., Inc., v. Seymour Geldzahler (210

Co-Brokerage Commissions: Sorting Out Who Gets What 

In most states, the laws describing when real estate agents are entitled to commissions are straightforward and clear. Typically, certain provisions of the commission agreement must be in writing. These usually include the listing's start date, end date, and, of

The Dangers of Stepping Outside Your Specialty 

As most brokers work their way through commercial transactions, they take a certain comfort in knowing that other professionals will review various data and financial statements. In fact, most brokers rely on this follow up procedure, usually perceiving their own

Terms of Estrangement 

A fairly common banking practice requires the signature of both spouses when a loan is made to a closely held family corporation. However, it is not widely known that it may be illegal, in certain circumstances, to compel borrowers and

Tenant Found Negligent for Arsonist Damage 

Most commercial leases contain provisions describing what should happen if fire partially or totally destroys the leased premises. In the event there is total destruction of the leased premises, it is not uncommon for the lease to terminate and relieve

Restrictive Covenants in Commercial Leases 

Restrictive covenants represent one of the more contentious issues between commercial landlords and tenants. A restrictive covenant, occasionally called an anti competition provision, usually gives the tenant certain exclusivity rights. Typically these rights prevent a landlord from renting to another

Righting the Wrongs of Rights to First Refusal 

During lease negotiations, landlords commonly grant tenants future rights in the form of either a right of first refusal or an option to purchase often without anticipating possible problems that these rights may cause. The 1993 Massachusetts case Hawthorne's, Inc.,

Landlords Must Seek Replacement Tenants for Breached Leases 

Traditionally, the landlord tenant relationship, one of the oldest legal arrangements in the history of British and American law, was governed by the principle, "He who has the gold rules." Change–and tenants' rights–have come slowly and with difficulty. While consumer

Lost in Additional Space Negotiations 

Although landlords frequently offer tenants the right to lease additional space in the same building as it becomes available, this kind of conditional right often leads to confusion, disputes, and litigation. If tenants don't exercise this right in the proper

Paper Footsteps Can Creep Up in Future Lease Disputes 

In prolonged tenant landlord negotiations, certain provisions in documents, particularly proposed leases, may be overlooked. If negotiations break down, the paper trail from the discussions may become significant. Understanding the significance of those documents, even in the negotiation stage, could

Leases Must Expressly Permit Landlord Damage Claims 

It is not uncommon for commercial landlords to believe that they are entitled to recover all fees and expenses directly related to a tenant's breach of its lease. Indeed, the provisions that describe the damages a landlord may recover in

Breach Fiduciary Duty and Lose Your Commission 

The fiduciary relationship between agent and client has long been a cornerstone of the real estate brokerage industry. This basic relationship is usually emphasized in introductory licensing classes as well as in more sophisticated analytical courses. If agents breach this

To Arbitrate or Not to Arbitrate 

When a party is ready to assert a claim, an attorney usually is contacted and papers are drafted and filed with a court of proper jurisdiction. It has become increasingly popular, however, for parties to agree, in advance, to arbitrate