Real Estate Listing Agreements: What Happens When An Agent Circumvents the Law?

Last Update: 04/18/16

It’s not news that Florida real estate professionals do bad things. Don’t get me wrong, there are solid professionals selling homes and condos here and then there are bad apples, too. Unfortunately, there are more real estate wrongdoing happening in Miami-Dade, Broward, and Palm Beach counties than you might think.

All Florida real estate brokers, and the real estate agents that work for them showing and selling residential property, are supposed to work within a specific set of laws passed by the Florida Legislature. Key here: they are supposed to know these laws, and follow them.

It’s a bigger job than you might think. There’s a lot more than one or two statutes to know. In fact, the entire Chapter 475 of the Florida Statutes focuses upon regulating the real estate profession. Under Florida Statute 475.001, these laws control the actions of real estate brokers, real estate agents, and real estate schools.

Failure to obey all these statutes means punishment of some kind. A license can pulled, for example, by the Florida Real Estate Commission. Criminal charges can be filed. It can also mean that the work of that real estate agent or broker will be considered void and not legally valid if the work was done outside Chapter 475’s specifics. That decision may be made in a Florida court, with damages awarded to the victim of the agent or broker.

How Does Failure to Follow Florida’s Real Estate Laws Impact Your Agreement To Pay A Commission For The Sale Of Your Home or Condo?

For instance, what happens when you are faced with a situation where the real estate professional is not properly licensed by the State of Florida to do business here as a broker or agent. If a person acting as a Florida real estate agent or broker agrees to sell, or even goes so far as to negotiate the sale of your home or condo, but didn’t bother to get or keep up a valid Florida real estate license, then that contract to pay a commission to that party is considered void under Florida law.

This is true even if the person was permitted, under the sales contract, to hire agents and brokers to act on his or her behalf, that were legally licensed by the state. That contract or sales agreement cannot be enforced and the seller does not owe them any commission.

A Florida real estate license applies statewide, not just to a particular county. But it better be valid and current!

The Case of The Unlicensed Broker Hiring Licensed Agents To Work for Him

Here’s an example. In the case of Wegmann v. Mannino, 253 F.2d 627 (5th Cir. 1958),  a contract was signed by William Wegmann and Nicholas Mannino (and others) for the development and sale of the Harbor View Villas subdivision. Wegmann had not registered as a real estate broker under Florida law. Harbor View Villas went forward: people bought into the subdivision. Things went well — until it came time for Wegmann to be paid under the agreement.

Mannino argued that Wegmann could not collect sales commissions on the real estate deals because he wasn’t a valid, licensed real estate broker.

So, Wegmann sued for “specific performance” of the sales agreement, to force Mannino to pay him. He lost.

Both sides agreed that under Florida Statute 475.41, if Wegmann’s actions were those of a real estate broker then the law would bar him from getting a commission on any sales. However, Wegmann tried to argue that the specific terms of the sales agreement didn’t bar him from being paid because he wasn’t acting as a broker personally. So he should be paid — he didn’t act as a real estate sales person, he hired people to do that for him.

The court reviewed each paragraph of the contract, word by word. It contained language that Wegmann was to act as an “agent” regarding the 68 acres of land owned by Mannino and his pals, including setting up a field office, and to “… employ suitable help, salesmen, or brokers, set up signs, advertise, and sell the lots.”

Accordingly, the court held, Wegmann was due no commission under Florida Statute 475.41. Even if, as he argued, that he didn’t do the work himself but hired agents and brokers that were legally licensed to do the job for him, that didn’t change things. The contract had Wegmann as the person ”… to supervise and control the subdividing, advertising and selling of a subdivision which the statute prohibited to all but licensed persons.”

From the Florida court, therefore, a warning to anyone who wants to circumvent Florida Chapter 475: it is considered an “important public policy in Florida” that real estate brokers are strictly regulated, and that licenses be issued only to “qualified persons of good character” because this is best for the Florida public interest, to protect the state’s citizens. The real estate professional who tries to work around the law does so at his or her peril.

Do You Suspect That Florida Law Was Not Followed by Your Real Estate Agent or Broker?

If you suspect that your real estate agent or broker has not followed the law in some way regarding the sale of your Florida home or condo, then you can file a complaint with the Florida Real Estate Commission – but they only have the power to deal with the real estate professional, their job is not to assess and award damages to you for your harm. For a claim for justice, you need to work with a Florida real estate lawyer to pursue your claims for fraud, breach of contract, and other civil causes of action. These may be negotiated and settled at a settlement table or pre-lawsuit mediation, or you may have to file an official lawsuit. Discussing your particular circumstances with an experienced Florida real estate lawyer can help you decide what is the best action for you to take.

A good piece of advice is to at least speak with an experienced Florida real estate lawyer to learn about your rights. Most real estate lawyers, like Larry Tolchinsky, offer a free initial consultation (over the phone or in person, whichever you prefer) to answer your questions.