Sale fell through but broker keeps commission

http://www.crainsnewyork.com/article/20101010/REAL_ESTATE02/310109974 Extell Development Co., says it is suing a number of firms for the return of advance commissions paid on condominium sales that subsequently fell apart at its newest Upper East Side tower, The Lucida. So far, Extell is the only developer taking such action, but others may follow suit. It became common during the boom for... [more]

http://www.crainsnewyork.com/article/20101010/REAL_ESTATE02/310109974 Extell Development Co., says it is suing a number of firms for the return of advance commissions paid on condominium sales that subsequently fell apart at its newest Upper East Side tower, The Lucida. So far, Extell is the only developer taking such action, but others may follow suit. It became common during the boom for builders to pay brokers half of their commission at the time of contract signing—which can be years before the unit is actually completed. “Now, developers are trying to get money on deals that defaulted,” says Leonard Ritz, an attorney at Adam Leitman Bailey. “Developers hate the idea of paying broker commission on deals that went bust.” “Commissions are only earned when a unit closes,” says an Extell spokeswoman, adding that several firms returned advance commissions as soon as they were requested. Hall Willkie, president of Brown Harris Stevens, insists that he's confident the court will rule in the brokerage's favor. [less]