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Hamptons.com
November 13, 2019

The Listing Agreement: What Is It And Why Should It Be In Writing?

John A. Viterittiby John A. Viteritti
in Real Estate
Home Real Estate

Attorneys, when called upon to litigate contract disputes between clients and their real estate brokers are asked to predict the outcome of the litigation, they wisely caution that it depends on the particular circumstances of the case. In other words, to coin a phrase, “the devil is in the details.”

What we will look at in this article are some of those details. The Listing Agreement, a contract entered into by the seller and broker, which defines their respective rights and obligations, is a good place to start.

First, under New York State’s Statute of Frauds, a Listing Agreement which is binding for a year or less need not be in writing to be enforceable; but experience dictates otherwise. It’s hard enough to decipher the facts when the Listing Agreement is in writing, and fraught with difficulty when it is oral.

Courts have ruled that if a real estate broker produces a ready, willing, and able buyer prepared to go to contract, in writing, that meets all of the terms as posed by the seller, the broker is considered to have earned the commission agreed to in the Listing Agreement. If the seller backs out of the deal through no fault of the buyer and without legal excuse, the seller owes the broker the commission. A common misunderstanding is that the broker has not earned the commission unless title passes. The fact is, passing of title may not be necessary unless the Listing Agreement makes the commission contingent upon title passing, except for willful default by the seller. If the buyer backs out through no fault of the seller or without legal excuse, the broker is not due the commission but the seller may be authorized by the contract between the seller and buyer to keep all or part of the deposit being held in escrow by the seller’s attorney. In that case, would the broker be entitled to receive part of the deposit kept by the seller? Courts have ruled, not unless a provision in the Listing Agreement between the seller and broker states that.

In instances where a broker has successfully sued a seller for a commission, the courts have awarded the commission, plus statutory interest retroactive to the date the commission was earned, not the date of the court ruling. Four years is a case in point.

The Listing Agreement should specify to whom and in what percentage or amount, the seller will be obligated to pay the listing broker’s commission, a sub-agent of the seller, a broker’s agent, or a buyer’s agent. Courts have ruled against a broker when these obligations were not clearly established in the Listing Agreement.

It is common for real estate brokers to include in their Listing Agreements a clause that addresses the circumstances by which the broker will be entitled to a commission from the seller should a buyer to whom the broker showed the property during the term of the Listing Agreement buy the property after the Listing Agreement has expired.

A word of advice: A Listing Agreement is a legally binding contract and should be entered into only with the advice of counsel.

In a future article we will examine the type of agreement that defines the rights and obligations between a broker and a buyer client.

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INTERVIEW: Rising Theater Star Scout Whiting Talks Taking On The Iconic Role Of “Annie”

INTERVIEW: Rising Theater Star Scout Whiting Talks Taking On The Iconic Role Of "Annie"

  • The Animal Rescue Fund of the Hamptons (ARF Hamptons) hosted the Bow Wow Meow Ball in East Hampton. The evening’s honorees, Ellen and Chuck Scarborough, were presented with the Champion of Animals Award, recognizing their more than twenty-five years of support to ARF. ⁠
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Over 400 guests celebrated ARF’s remarkable work with cocktails, followed by dinner catered by Olivier Cheng. Peter Marino, accompanied by his daughter and ARF Board Member Isabelle Trapnell Marino, presented the Scarboroughs with their award. ⁠
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📸: Patrick McMullan/PMC⁠
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Check out the full gallery at Hamptons.com (Link in Bio)⁠
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#arf #bowwowmeowball #hamptons #animalrescuefund #animalrescue
  • Make sure to add this event to your list for next summer
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  • I recently toured the new Rolex Boutique by London Jewelers in East Hampton, and it’s one of the most beautiful retail spaces I’ve ever stepped into. Located on Newtown Lane, the boutique is set inside a restored historic home that dates back to 1897, originally designed as a summer cottage.⁠
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From the outside, it has that classic East Hampton charm, cedar shingles, white trim, and lush landscaping. But once you step inside, it’s all about quiet sophistication.⁠
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The space is warm and welcoming, with walnut wood paneling, soft neutral tones, and beautiful textures throughout. There’s a fluted marble wall in a rich green Verdi Alpi stone that immediately catches your eye. It’s one of those details that’s understated but unmistakably Rolex.⁠
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#rolex #easthampton #hamptons #luxury #watch⁠
  • 🎾 Men’s US Open Final Viewing Party⁠
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Watch the riveting Men’s US Open Final with drinks, grilled classics & fellow tennis fanatics in the lush garden.⁠
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🦞 Montauk Seafood Festival⁠
📅 Sat, Sept 6 – Sun, Sept 7 • 12–5PM⁠
📍 On the Green, Montauk⁠
The ultimate seafood event in the Hamptons! Lobster rolls, fish tacos, chowder, oysters & more 🐚🍤⁠
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🩰 Master Class w/ Kat Wildish⁠
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Open-level adult ballet class with world-renowned former NYCB & ABT dancer Kat Wildish. One day only!⁠
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🎶 Hamptons Festival of Music⁠
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🌾 Outstanding in the Field (Sagaponack)⁠
📅 Sun, Sept 7 • 3PM⁠
Dine where the food is grown! Guest chef Jason Weiner returns for his 19th year 🍽️🌱⁠
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📅 Sun, Sept 7 • 11AM⁠
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