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Based on ruling 82141 of the Eretz Hemdah-Gazit Rabbinical Courts

Agent who Did Not Set Agent’s Fee


Beit Din Eretz Hemda - Gazit

Iyar 5783
Case: The plaintiff (=pl), a real estate agent who specializes in apartments in the Chassidish sector, put an ad in the paper for an apartment (=apt) at 2.4 mil. NIS, being sold by the developer (=sel). The defendant (=def) responded to the ad and had pl speed up the sales process to buy before other potential buyers. Def ended up buying apt for 2.485 NIS. Pl demands a 2% agent’s fee. Def refuses to pay any fee with various claims. 1. Def’s brother heard about apt from a different agent (at a higher price), so that def could have bought it without pl. 2. Pl attracted him to apt with an inaccurate price. (Pl responds that she thought she could convince sel to lower the price, but quickly told def that she was wrong). 3. Pl might have been a marketer for sel rather than an agent. 4. Pl is not a licensed agent and did not sign def on an agent’s contract, as required by law. 5. Pl pressured him to agree to make a down payment before it was legally safe, so that she helped sel at his expense. (Pl responds that def was in danger of losing the opportunity to get apt, and her intervention helped prevent it).

Ruling: An agent who introduces the property to the buyer is usually considered the purchase’s "effective factor," who deserves the agent’s fee. The claim that even without the agent, the buyer would have learned of the property from someone else is not a reason to preclude payment from the one who introduced it. This is certainly so here, where, by def’s admission, pl and def had 20-30 phone conversations and exchanged many emails. The job of an agent includes bringing the parties to agreement, which sometimes includes trying to convince one side more than the other. Thus even if pl’s belief that she saved def from losing apt is untrue, pl did enough to facilitate the sale to deserve a fee. The fact that pl initially presented an inaccurate price did not end up being a problem, as def determined that apt was well worth his while even at the higher price.
At different times during his presentation and answering questions, def said things that contradict his contention that it was unclear that pl was an agent (who always receives a fee from buyers). The ad he saw referred to pl’s business as an agency. Def said that he did not ask pl whether/how much she would take as a fee because he was afraid to do so, as agents like to take 2%. Also, when the renter allowed buyers to see apt, def was there with several agents and buyers, which would not happen if pl was sel’s marketer.
We usually uphold the Israeli law that an agent must be licensed and sign clients to a contract, as this is a proper practice that limits disagreements. However, pl is an experienced agent whose rebbe is against her holding a government license, and many in that segment of society (to which def belongs) do not sign people on an agent’s contract, seeing it as a lack of trust. We are unwilling to facilitate def coming in bad faith and using technicalities and patently false claims to avoid paying for a valuable service he received.
Next week we will see a disagreement between the dayanim on how much def should pay.

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