A real estate brokerage commission case in United Real Estate & Property Management, Inc. v. Ihar Unkown a/k/a Igor Charnyshov and Volha Yablonskaya (28 Misc.3d 804, 905 N.Y.S.2d 487, 2010 N.Y. Slip Op. 20228) is a perfect reminder as to why our MLS and most MLS standard listing agreements include a broker protection clause. The United Real Estate case was decided in Kings County Civil Court on June 11, 2010. In summary, the Court held that when a salesperson left her broker’s office to affiliate elsewhere and the listing expired, even though negotiations were in process at the time that the salesperson changed offices, the original broker could not secure payment of its commission because no broker protection clause existed in the listing agreement.
What is an Extension Clause (a Broker Protection Clause)?
Our MLS model form includes an extension provision granting rights to the broker after the listing expires under specific circumstances. This clause, referred to as “OWNER(S) OBLIGATIONS AFTER THE EXPIRATION OF THIS AGREEMENT”, states as follows:
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