Newton Centre Realty, Inc v David Jaffe
Newton Center Realty, Inc. V David Jaffe
Massachusetts Appeals Court
Argued 3/3/20-Decided 6/23/20
On June 23, 2020 the Massachusetts Appeals Court decided a case of first impression in the Commonwealth regarding brokerage fees. The question addressed was does the death of a seller terminate a real estate brokerage agreement between the seller and a broker.
In 2017 a seller entered into three exclusive brokerage agreement to sell two residential properties in Brookline and one in Newton. The agreements were on standard GBREB forms. Under each agreement the broker was entitled to a four percent commission. The seller died and the seller’s son sold the properties independent of the broker, but within the exclusivity period of the agreements that had been properly executed. The broker sued the Sellers estate and was unsuccessful at trial. The case was brought up on appeal. This issue had not been decided under Massachusetts law.
The agreements here created a principal-agent relationship that entitled the broker to a commission if Shirley’s (the Seller) properties were sold within the exclusivity period. They did not confer an interest in the property. Accordingly, Shirley’s death terminated the agency relationship, and the broker was not entitled to recover contract damages from Shirley’s estate. The Superior Court judge properly dismissed the complaint for failure to state a claim.
The Appeals Court upheld the lower court ruling that the death of the seller terminated the agency relationship, and the broker was not entitled to a commission.