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Procuring Cause: Key Insights into Its Legal Implications in Real Estate
Definition & Meaning
Procuring cause refers to the actions that initiate a series of events leading to the sale of a property in a real estate transaction. A real estate broker may be entitled to a commission as the procuring cause if they successfully connect a buyer and seller and facilitate the sale through ongoing negotiations. However, this entitlement may not apply if the buyer and seller intentionally exclude the broker from the process.
Table of content
Legal Use & context
The term procuring cause is primarily used in real estate law. It plays a crucial role in determining whether a broker is entitled to a commission after a property sale. Understanding this concept is essential for brokers, buyers, and sellers alike, as it can influence negotiations and commission disputes. Users can manage related forms and agreements through resources like US Legal Forms, which provide templates drafted by qualified attorneys.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
(Hypothetical example) A broker shows a property to a potential buyer and continues to communicate with both the buyer and seller, facilitating discussions and negotiations. If the sale is completed, the broker may claim a commission as they were the procuring cause.
(Hypothetical example) If a buyer learns about a property through a broker but later contacts the seller directly and negotiates a sale without the broker's involvement, the broker may not be entitled to a commission.
State-by-state differences
State
Procuring Cause Definition
California
Emphasizes the broker's role in negotiations and direct involvement with both parties.
New York
Focuses on the broker's actions leading directly to the sale, with specific criteria outlined in state law.
Texas
Requires clear evidence of the broker's involvement in the sale process to establish procuring cause.
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
Comparison with related terms
Term
Definition
Procuring Cause
Actions that lead to the sale of a property, entitling a broker to commission.
Exclusive Agency
A contract where a broker earns a commission only if they find a buyer, but the seller can also find one.
Listing Agreement
A contract between a seller and a broker detailing the broker's right to sell the property.
Common misunderstandings
What to do if this term applies to you
If you believe procuring cause applies to your situation, consider the following steps:
Document all communications and negotiations with the buyer and seller.
Review any agreements with your broker to understand your rights regarding commission.
Consult with a legal professional if there are disputes regarding commission entitlement.
Explore US Legal Forms for templates that may assist in your negotiations or agreements.
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