GRP Rainer LLP

A Broker's Right to Commission Despite the Invalidity of the Brokerage Agreement

Even a brokerage agreement can be rescinded if a ground to challenge exists and ultimately be invalid. Nevertheless, the broker may retain a right to claim commission.


Cologne, NRW -- (SBWIRE) -- 02/06/2013 -- GRP Rainer Lawyers Tax Advisors, Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart, Hanover, Bremen, Nuremberg, Essen and London explain: If a brokerage agreement concluded between a broker and an interested party is invalid, the broker may nonetheless be entitled to claim commission. This would firstly be conditional upon the broker acting as a salesman for the interested party, who must also be able to discern this. Additionally, the broker’s services have to be justified by the existing relationship between the parties concerned, i.e. the broker may not act without a legal basis from the perspective of the interested parties.

The amount of commission is determined according to the prevailing local practices and can thus be objectively ascertained and is not at the discretion of the parties. However, this does not apply if an agreement on remuneration was concluded. This also applies with respect to costs that the broker would have been able to avoid in adhering to the standard of care incumbent upon him.

Brokers can, however, also frequently charge for commissions wrongfully. In these instances, the interested party, or buyer as the case may be, may be entitled to a claim for restitution. Even in cases where an initially valid agreement is rescinded, a broker’s commission may subsequently be inapplicable and the buyer thus has a claim for repayment.

Due to the manifold combinations, it is difficult for many clients to recognize whether the broker’s commission has come about correctly and also whether the broker may retain the commission. For this reason, those purchasing real estate should turn to an experienced lawyer. He is able to examine for you whether the commissions were correctly paid. Should the broker have no right to the commission, a lawyer will support you in reclaiming the amount paid.

These claims for restitution are always subject to prescription. Aggrieved parties are therefore advised not to wait too long before asserting their claims.

About GRP Rainer LLP
GRP Rainer LLP is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Essen, Frankfurt, Hamburg, Hannover, Munich, Stuttgart, Bremen, Nuremberg and London UK.

Contact Michael Rainer
Lawyer, Managing Partner

GRP Rainer LLP
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50672 Cologne

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