Legal Updates

A realtor may charge brokerage fee from the lessee even if acted on behalf of the lessor

June 21, 2020
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A lessee of an apartment met with a realtor of the lessor and agreed the terms of the lease. Only thereafter the realtor demanded brokerage fee from the lessee.
The Court held that it is not prohibited that the realtor of the lessor charge the lessee brokerage fee. Israeli law sets that a tenant may not be burdened with payments that the lessor owes to a third party, including brokerage fee if the broker acted on behalf of the lessor. However, this refers to debts of the lessor that are attributed to the lessee. There is no restriction on the broker charging brokerage fees independently from the lessee, if such are not a payment that the lessee pays "in lieu" of the lessor. The broker may request and receive brokerage fee from any side of the transaction. Here, the broker did not charge brokerage fee from the lessor and did not receive brokerage fee from him. He demanded brokerage fees solely from the lessee for the lessee's part in the transaction and this is not an illegal demand especially when he was the effective factor in the transaction and without him the transaction would not have been made.