Broker Commission Disputes

Broker Commission Disputes in New York Real Estate

Real estate transactions in New York often involve high-value assets, intricate paperwork, and substantial financial stakes. Given these complexities, broker commission disputes are not uncommon and can arise in several scenarios. Whether stemming from verbal agreements, written contracts, or misunderstandings between brokers, resolving these disputes efficiently requires experienced legal counsel.

When Do Broker Commission Disputes Arise?

A typical scenario involves agents agreeing to split a commission often informally or based on custom. However, conflict over commission entitlement can result when the terms aren’t clearly documented, or one party claims to have played a more significant role in securing the buyer.
In New York, a broker must prove they were the “procuring cause” of the transaction to be entitled to a commission. This means the broker must demonstrate that their actions directly led to the sale or lease of the property. While this might sound simple, it often becomes a contentious issue. Factors such as:

Open house participation,
Initiation of negotiations,
Continued involvement through closing,

can all be scrutinized in determining who was truly responsible for bringing about the deal.

The Role of “Tail” Provisions in Brokerage Agreements

Another common area of dispute arises after the expiration of a brokerage agreement. Many contracts contain “tail” or “carryover” provisions, which allow brokers to earn commissions on deals that close post-contract, provided they introduced the buyer or tenant during the agreement’s term.

Under New York contract law, these provisions are generally enforceable, but disputes arise over their scope and interpretation. For example, a seller may challenge whether the lead was truly generated by the broker, or whether the eventual sale was substantially unrelated to the broker’s efforts.

Legal and Alternative Dispute Resolution Options

To minimize risk, agents and brokers should:

Avoid relying on oral agreements,
Clearly outline commission-sharing terms in written contracts,
Work exclusively with clients or secure co-broker agreements in writing.

In the event of a dispute, New York’s real estate boards and associations often offer mediation and arbitration services. These are viable alternatives to litigation provided all parties agree to participate. However, when alternative dispute resolution fails or is unavailable, the matter may proceed to civil litigation in New York Supreme Court, where detailed contract interpretation and evidentiary analysis will determine the outcome.

Why Legal Representation Matters

Litigating broker commission disputes in New York requires not only a deep understanding of real estate law but also strategic advocacy. At Held & Hines LLP, our attorneys bring extensive experience in real estate litigation, representing brokers, agents, and firms in complex commission-related conflicts.

We are committed to safeguarding your interests—whether the dispute involves:

A commission agreement breach,
A seller who refuses to pay,
A conflict between co-brokers or agents from different firms.

With a proven track record of success and a client-first approach, Held & Hines delivers the gold standard in legal representation for New York’s real estate professionals.

FAQ: Broker Commission Disputes in New York

What is a procuring cause in real estate?

A procuring cause refers to the broker or agent whose actions directly led to the completion of a real estate transaction. Under New York law, this is a key factor in determining commission entitlement.

Are oral commission agreements enforceable in New York?

Generally, oral agreements can be enforceable under New York law, but proving the terms and existence of such an agreement in court is much more difficult than with a written contract. For real estate brokers, written agreements are strongly recommended.

What happens if a deal closes after my listing agreement expires?

If your brokerage agreement includes a tail provision, you may still be entitled to a commission. These provisions extend your rights for a set period post-expiration, provided the buyer was introduced during the agreement’s term.

Can I sue for unpaid real estate commissions in New York?

Yes. If you believe you are owed a commission, you may bring a breach of contract claim or other relevant legal action in New York civil court. Consulting an experienced real estate attorney is crucial to assess your case.

How can I avoid commission disputes with other agents?

To prevent disputes:

Put all agreements in writing,
Clarify commission splits in co-brokerage agreements,
Avoid sharing confidential leads,
Use formal dispute resolution methods if needed.

Contact Held & Hines LLP for a Free Consultation

Contact Held & Hines LLP today to schedule a consultation and protect your commission rights. We proudly represent brokers, agents, and real estate professionals across New York City and surrounding areas.

855.HELD.HINES