Brokerage Statutes – Shield Or Sword?

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For some reason, it seems that the business of real estate brokerage is subject to a little more scrutiny than experienced by other businesses. For example, there is a common law principle known as the Statute of Frauds. A book could be written about this aspect of the common law and its subsequent incorporation in most state statutes (written law). We won’t write one today.

Most jurisdictions have some form of a Statute of Frauds, and it appears that all or almost all “derive from the Statute for the Prevention of Frauds and Perjuries passed by [the English] Parliament in 1677.” Despite such a lofty name, some have described these laws as “Statutes to Perpetrate Fraud.”

We aren’t going to assume that all readers already know what this kind of “Statute” covers, so here goes. When someone speaks of the Statute of Frauds, she or he is referring to a law that requires enforceable agreements to be in writings signed by the parties against whom someone wants the agreement enforced. The Statute never applied to all agreements and good quality Swiss cheese doesn’t have as many holes as does the Statute of Frauds. [Read more…]

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So, Exactly What Does A Broker Bring To The Table In 2015?

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The “third rail” has been in the news for the last few days and that made Ruminations think about posting this piece having to do with the role of brokers in commercial lease transactions. At the risk of needing to purchase a bespoke Nomex suit crafted to protect against possible flaming, we proceed.

Brokers make the marketplace work. They connect parties who might not have known of each other’s interests in the absence of the broker’s efforts. Certainly, the internet and the information age have made information readily available that historically had been in the “secret” files of the brokerage community. If, however, that were the only grip a broker had over prospective buyers, sellers, tenants or landlords, the show would have been over a long time ago – the curtain would have fallen.

[Read more…]

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What Should a Leasing Brokerage Agreement Say?

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Let’s see if Ruminations can work near the third rail without touching it. No flaming please.

There are two kinds of lease brokerage agreements: the ones that appoint a broker to represent a property or a particular leasable space; and, the ones for a specific deal on the table. In our experience, retail leasing brokerage agreements are frequently written for a particular lease. That doesn’t mean that there aren’t a lot of leasing assignment brokerage agreements, but it sure seems that the one-up ones are pretty common. So, today’s discussion today will be biased toward this variety. If we don’t get electrocuted, we might try juggling razor blades again with a later set of thoughts about the “appointment” variety. [Read more…]

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