Procuring Cause Disputes

Sometimes either the buyer or the seller of a home works with multiple real estate agents to buy or sell the home. Procuring cause disputes occur if a buyer or seller works with several real estate agents during the sales process, and each agent believes that they are entitled to the commission arising out of the sale. The procuring cause of the purchase or sale has to do with the interaction between the buyer or seller and the agent that results in a sale. At Pulgini & Norton, our Boston real estate lawyers can advise buyers, sellers, and others involved in a property transaction when a procuring cause dispute arises.

Often, commission disputes are resolved through an examination of "procuring cause." Some instances in which procuring cause may be at issue include situations in which a buyer and seller are simply introduced by an agent, a broker did not have authority to show the property, an agent refers a potential buyer to a property but does not actually show the property to the potential buyer, or an agent shows the property to a potential buyer, but the seller is the party to actually finish the transaction.

Generally, a broker or salesperson need not be present when the buyer and seller sign an offer or purchase and sale agreement. The agent who first shows a piece of residential real estate to a buyer may not be the procuring cause of a sale. The agent who obtained an offer from the buyer and presented and negotiated it may not be the procuring cause. Instead, in order to obtain a commission, the agent or broker needs to show that they were the initiating person in a chain of events that resulted in the purchase and sale. The broker who instilled an interest in the buyer that led to their buying it is the party who is the "procuring cause."

Sometimes procuring cause disputes may be avoided by an agent who requires a buyer or seller to sign a buyer's agency or listing agreement. The agreement will spell out the nature of the relationship between the agent or broker and the buyer or seller. The agreement will also specify who gets the commission after a purchase or sale is completed.

Often, the facts surrounding a procuring cause dispute are ambiguous, with multiple factors potentially affecting an evaluation of who sparked a buyer's interest. It may be helpful to retain an attorney at the start of the purchase or sale process so that you fully understand your rights and obligations in connection with a purchase and sale agreement.

Alternative dispute resolution (ADR) may be used to resolve a procuring cause dispute. There are arbitration clauses provided under the Code of Ethics of the National Association of Realtors. When the parties have not agreed to ADR, it may be necessary to litigate a procuring cause dispute. At Pulgini & Norton, our experienced Boston real estate attorneys can assist you with procuring cause disputes. Our firm also represents buyers, sellers, associations, and lenders in Cambridge, Waltham, and New Bedford, among other Massachusetts communities. Call us at 781-843-2200 or contact us through our online form for a consultation with a property transaction attorney.