Printer Friendly

Property sold after listing period, broker's bid for fee fails.

Byline: Virginia Lawyers Weekly

Because the sale of real property took place after the listing period and under a contract that was materially different from the first agreement, a broker was not entitled to a fee.


Ware Creek Real Estate Corp. entered into a real estate listing agreement with

J&R Enterprises. Under the listing agreement, Ware Creek received from J&R an exclusive listing to sell the subject parcel of improved property for a period of six and a half months, terminating on May 1, 2008. If the property was "sold or exchanged" during the initial period, Ware Creek was entitled to a commission of 10 percent of the sales price, regardless of whether Ware Creek initiated the sale.

The listing agreement also provided for what is commonly known as a "protection period," which in this instance covered a period of 90 days. Specifically, the listing agreement states: "If within 90 days after the expiration of the initial period of time or any extension thereof, the Property is sold or exchanged by the Broker, by Owner, or by any other person, to a purchaser or purchasers to whom the Property was shown, offered, or introduced by the Broker, or by any licensed broker or salesperson employed by or affiliated with the Broker, Owner agrees to pay Broker the Fee."

On June 2, 2008, during the 90-day period, J&R entered into a written "Contract of Purchase" for the property with a purchaser identified as Jackass Flats, LLC. Monte Brown and George Allen signed the contract on behalf of Jackass Flats, and there is no dispute that Ware Creek introduced the property to Allen and Brown. Under the contract, Jackass Flats agreed to pay $300,000 to J&R for the property. While the contract did not contain a "time is of the essence" clause or an expiration date, it did provide for the transaction to close "on or about September 2008." The contract was contingent, however, on the purchaser obtaining "adequate and suitable financing." Over the next few months, Brown and Allen contacted several local banks and attempted to obtain financing, but were ultimately unsuccessful. As such, the parties did not close on this contract.

More than a year after executing the 2008 contract, J&R and Jackass Flats entered into a new contract for the sale of the property, dated June 29, 2009, containing materially different terms. The 2009 contract provided for 90 percent owner financing of the $300,000 purchase price, with a $30,000 down payment. Furthermore, to raise the proceeds for the down payment, Allen and Brown secured an additional investor in Jackass Flats in the week before executing the 2009 contract (Brockwell). Under their newly formed arrangement, Allen, Brown and Brockwell each invested $10,000.00 for Jackass Flats' purchase of the property.

After a bench trial, the circuit court entered judgment in favor of Ware Creek in the sum of $30,000.


Based on our interpretation of the listing agreement, the 2008 contract and the 2009 contract, along with our application of the undisputed facts recited above to the terms of these instruments, we conclude that the property was not "sold or exchanged" under the 2008 contract pursuant to the terms of the listing agreement. Rather, J&R sold the property under a new and materially different contract executed more than a year later (the 2009 contract) that was not covered by the listing agreement. Therefore, as a matter of law, Ware Creek was not entitled to the commission under the listing agreement that the circuit court awarded to it.

In defending against this action, J&R requested, in its responsive pleading to the amended complaint, that it be awarded the attorney's fees pursuant to the fee-shifting provision incorporated into the listing agreement. Accordingly, we reverse the circuit court's judgment awarding the commission to Ware Creek and remand the case for consideration of J&R's request for attorney's fees incurred below and on appeal.


J&R Enterprises v. Ware Creek Real Estate Corp., Record No. 170854, Oct. 4, 2018. SCV from New Kent Cir. Ct. VLW No. 018-6-071, 3 pp.

Copyright {c} 2018 BridgeTower Media. All Rights Reserved.
COPYRIGHT 2018 BridgeTower Media Holding Company, LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2018 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:J&R Enterprises v. Ware Creek Real Estate Corp., Virginia Supreme Court
Publication:Virginia Lawyers Weekly
Date:Oct 28, 2018
Previous Article:Follow up treatment for work accident denied.
Next Article:Beach house owner not liable for injury to renter.

Terms of use | Privacy policy | Copyright © 2020 Farlex, Inc. | Feedback | For webmasters