When is a real estate commission deemed earned?

Most real estate agents derive their income solely from real estate commissions.  In the world or real estate transactions, at time disputes arise between sellers, buyers, and their real estate agents whether a real estate commission is due and payable to the agent.  The guiding concept in most of these disputes is the “procuring cause doctrine” which applies both in commercial and residential transactions.  It is a principle of law containing several parts but stems from the overriding principle that when a real estate agent has brought parties together and a sale is effectuated as a result of continuous negotiations inaugurated by him or her, the agent will not be denied compensation.  A common fact pattern involves a situation where the real estate agent presents an offer, the owner accepts the offer in writing, but then refuses to close the transaction.  Provided the real estate agent was involved in continuous negotiations resulting in an executed binding real estate contract, the commission is deemed earned in that scenario.  Florida case law has developed carving out certain exceptions.  One example includes where the real estate agent has abandoned negotiations or communications with his or her owner client. That period of inactivity could result in the loss of the commission even if the buyer who was introduced to the property by the agent ends up as the purchaser.  Often times, the procuring cause doctrine need not be put to use where a fully executed listing agreement exists.  As involving a dispute between an owner and his or her agent, the terms of the listing agreement govern the parties’ respective obligations without regard to the principles of the procuring cause doctrine.