HEEEELP!!! RLA nightmare

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Submitted by slrs1964 on September 18, 2013 - 4:58pm

We went into contract with a local SD RE company to sell our home. We had a contingency for us to find suitable housing. Found a buyer. Agreed to a contract. Could not find suitable housing. Renegged on contract with buyer (signed cancellation by both parties). RLA with RE agencey expired 10/01/12. Today, 09/18/13, received certified letter demanding RE agency's commission (6%) of list price. Letter cited RLA sections 4. A. & sub (3) and section 19. Dispute Resolution sub A. if non-compliant or agree to pay full commission. These people were scumbag crooks and new we didn't want to continue with our RLA agreement, and we even sent a letter explaining that we didn't want to sell to the prospective buyers, or to anyone else for that matter. They told us that if we just didn't sell using any other agency till the end of the RLA (actually 3 months past that time) all would be good. Now this. Must be a time limit for them to file this claim (1 year i suspect). They never mentioned the need to submit the form to nullify the RLA contract with them, though they knew we were no longer interested in selling and that they had underperformed in their capacity in almost every way when we were still interested in selling. In fact once we got out of the seller/buyer contract, we heard from them only 2 - 3 times more till the end of the RLA. Like I said - HEEELLLP!!! $28k is at stake here!

Submitted by FlyerInHi on September 18, 2013 - 5:07pm.

Sorry, you owe them the commission. They found you a buyer and you changed your mind.

What? Do you think people work for free?

Submitted by njtosd on September 18, 2013 - 5:25pm.

I am aware of at least one fairly prominent agent who purported to be unaware of whatever section it is that entitles them to the commission once a contract reaches a certain stage of maturity even if the deal never closes (can't remember what the milestones are anymore). Not sure if she was actually unaware or playing dumb. It may be the broker, not your agent, who's decided to try to enforce that section. In any event, we modified that same section before we signed it to avoid just what you're dealing with now. I'd get a good lawyer.

Submitted by slrs1964 on September 18, 2013 - 6:43pm.

Free no... But $28k when I was showing the house (just a few times) when they should have been (they never did). I mean, they basically filled out the paperwork, put a lockbox on the door, placed it on the MLS... and that was about it. Plus the stipulation was contigent on us finding acceptable alternative housing - which we tried in ernest - but could not achieve. And the agents KNEW that was a deal breaker.

Submitted by njtosd on September 18, 2013 - 8:16pm.

I don't know what the details are with respect to timing, etc., but unless you received some sort of release from the brokerage, you're going to need a lawyer to sort this out. Do you have anything from the agent as evidence that "all would be good" if you didn't sell using anyone else during the 3 months following the end of the RLA?

The standard form in California was written by the realtors for the protection of the realtors. One should always be cautious . . .

Submitted by jstoesz on September 18, 2013 - 9:56pm.

It sounds like an obvious case of, "go screw yourself, you are not getting one red cent out of me. Try suing me, because you have an unenforceable contract" type of situation.

Lots of people ask for money they are not entitled to, just because they ask does not mean you need to pay. If there is an out for you written in the contract lean on it, and don't let them scare you.

I have no patience for people you threaten others whom they have performed little or no service for. And I am a consultant by trade. I would never charge a client for a service they are truly unhappy with.

Submitted by paramount on September 18, 2013 - 10:29pm.

It's called shakedown by shark.

Submitted by SD Realtor on September 19, 2013 - 10:35am.

Whenever you cancel any contract you do so in writing. CAR forms include cancellation of listing and purchase contracts. You did not know that but your agent and his/her broker did.

While there are contractual obligations under the RLA the courts are very aware of the knowledge level of general consumers verses real estate professionals.

You have two places to start. The first is the DRE. Although it is a chore you can contact them and talk to them about this issue. You can also choose to file a complaint against the broker with the DRE. He is being an ahole to you. Second you can contact SDAR, the San Diego Association of Realtors and let them know what is going on. Both of these entities may or may not have some legal services for you to contact. However, they are in the business of providing legal services to realtors/brokers, not consumers.

Prior to contacting these entities call the broker and let them know you will be filing a complaint against him with each of these entities. Furthermore ask him why he never provided you a written release from the RLA and/or the purchase agreement when he knew full well you were done with his services. Let him know that after you contact these entities you will be contacting a real estate attorney to get a full range of options.

Submitted by scaredyclassic on September 19, 2013 - 10:46am.

After the matter is resolved you'll still probably be on his junk mail list getting solicitations for referrals

Submitted by ucodegen on September 19, 2013 - 11:07am.

Did the contract with these 'realtors' include the contingency clause? If so, these 'realtors' are SOL because the 'trigger' was the purchase of a new house - the sale of the existing being contingent on the new house. Was there any 'fee' in the contract that indicated that if the contingency fell through, you would have to pay the realtors? .. Please read contracts before signing them ..

Submitted by SK in CV on September 19, 2013 - 11:39am.

I'm a little bit confused about the timing and what the exact nature of the claim. Are the brokers claiming that they earned a commission because they brought you a qualified buyer, had an offer that you agreed to, and you backed out of, and therefore owe them a commission? Or is the commission somehow related to effectively cancelling the listing prior to its expiration?

I've heard of claims similar to the former, but never the latter.

It would seem to me that if your listing agreement (not the sales agreement) didn't have the qualification for replacement housing, the broker has a much stronger claim. I'm not saying it's a valid claim. But I have heard of similar claims being affirmed by the courts.

Submitted by SD Realtor on September 19, 2013 - 12:26pm.

I would agree with SK. In fact, sentences 2 and 3 from the post seem to conflict. If you could not find suitable housing then you did not reneg on the contract with the buyer. However you said you did reneg. If you did not attempt to find suitable housing and basically threw in the towel, then perhaps that is another story.

The RLA never is subject to anything but terms in the RLA. Thus a contingency in the purchase agreement is not part of the RLA. So I guess it all depends on the interpretation by whoever presides over the case.

Submitted by SK in CV on September 19, 2013 - 12:36pm.

That's exactly what I was thinking SDR. I had a friend with a very expensive house who gave his realtor buddy a listing for $10.6 million. Way over market (by a couple million at least), the realtor thought it would be prestigious for him to have the highest listing in the neighborhood. A buyer offered full price. When my friend (the prospective seller) backed out, the buyer was ok with it. The buyers agent however, was not. Judge agreed with the agent. Cost him $300K not to sell his house. (happy ending, his house is now probably worth >$20M)

Submitted by SD Realtor on September 19, 2013 - 12:56pm.

Yep I would agree with you... rereading the original post, things seem a little murky. Unless there is some more clarification it seems like it could go either way.

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