Prior to the 2008 recession, the South Florida skyline was teeming with cranes as the real estate market boomed. But newly or partially completed projects remained empty as developers and brokers were unable to sell residential and commercial properties and projects. With the entire real estate community reeling, brokers, developers, lenders, investors and buyers and sellers often turned to the courthouse to resolve disputes as the South Florida real estate market plummeted. As we emerge from the recession, a review of the events of the past few years may help to avoid future litigation.
During the recession, we saw many real estate brokers resort to litigation when they were not paid commissions they believed were due under their agreements. In condo projects, the agreements between developers and brokers often called for brokers to receive commissions in a series of payments. For example, a broker may have been paid one-third of the commission after the first deposit, one-third after the second deposit and the final third after closing. But as the economy slipped and units stopped selling, there were often insufficient funds to make the last commission payment or payments, forcing brokers to litigate. Many cases settled for a portion of the full amount due.
