Procuring Cause

Procuring Cause is a legal term predominantly used in real estate to determine whether a broker is entitled to a commission. It refers to the action that resulted directly in achieving a specific goal, such as the sale or lease of a property.
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Definition

Procuring Cause is a legal doctrine used to identify which real estate broker is entitled to a commission. It refers to the action or series of actions initiated by a broker that directly leads to the successful completion of a transaction, such as the sale or lease of property. The concept is essential in disputes over commission claims when multiple brokers are involved in a single transaction.

Examples

  1. Broker A shows a client several properties, including one the client eventually buys after a few weeks.

    • In this scenario, Broker A could be considered the procuring cause of the sale, assuming there were no intervening agents who do significant additional work leading to the transaction.

  2. Broker B introduces a client to a property and facilitates several negotiations between the buyer and the seller. The client then buys the property through Broker B.

    • Broker B is likely the procuring cause of the sale, having actively guided the negotiation process that led to the transaction.

Frequently Asked Questions (FAQs)

What determines procuring cause?

The determination of procuring cause involves examining whether the broker’s actions were the uninterrupted and timely cause of the transaction. Factors include initiating contact with the client, showing the property, and conducting negotiations.

Can more than one broker claim procuring cause for the same transaction?

Generally, procuring cause is awarded to a single broker or firm. However, disputes can arise when multiple agents claim involvement, and these disputes are often resolved through mediation or arbitration.

What role do written agreements play in procuring cause disputes?

Written agreements such as listing agreements and buyer’s representation contracts serve as critical evidence in determining procuring cause. They establish the broker’s involvement and the terms under which the broker operates.

  • Exclusive Listing: A contract where a seller agrees to work with only one broker for a specified period to sell their property.
  • Open Listing: A contract allowing property owners to list their property with multiple brokers, with commission paid only to the broker who brings a successful buyer.
  • Commission: The fee paid to a real estate broker for their services in facilitating a transaction, typically a percentage of the property’s sale price.
  • Dual Agency: A situation where a real estate broker represents both the buyer and the seller in the same transaction.

Online References

Suggested Books for Further Studies

  • Real Estate Law by Marion R. Realvor
  • The Language of Real Estate by John Reilly
  • Modern Real Estate Practice by Fillmore Galaty, Wellington J. Allaway, and Robert C. Kyle
  • The Encyclopedia of Real Estate Forms and Agreements by Atlantic Publishing Group Inc.

Fundamentals of Procuring Cause: Real Estate Basics Quiz

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Thank you for considering the critical elements of procuring cause with us. Keep aspiring for more in-depth understanding in the world of real estate!

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