As mentioned, the sale agreement was conditional on a terminating condition, according to which if the buyers do not sell the house they own by June 2, 2023, the buyers will be entitled to cancel the agreement. The buyers did not sell the house they owned, and on May 23, 2023, before the second payment date arrived, they notified the defendants in writing of the cancellation of the sale agreement.
Given that in the amended exclusivity agreement, it was determined that the plaintiff would be entitled to brokerage fees only on condition that the defendants receive at least ILS 2,000,000 from the buyers, and given that the defendants received from the buyers by virtue of the conditional sale agreement a sum of only ILS 1,500,000 (which was also recovered in accordance with the provisions of the sale agreement), then the plaintiff is not entitled to brokerage fees in respect of the conditional sale agreement.
- In addition, I am of the opinion that in view of the fact that the conditional sale agreement was conditional on a terminating condition, which existed, and by virtue of which the sale agreement was cancelled, the plaintiff was not entitled to brokerage fees by virtue of the conditional sale agreement. I will reason.
- Section 14 of the Real Estate Brokers Law, 5756-1996 (hereinafter: "the Realtors Law") states that a real estate broker will be entitled to brokerage fees if a number of conditions are met, including if "he was the effective factor that led to the parties' engagement in a binding agreement". The question relevant to this part of the discussion is whether the parties entered into a "binding agreement".
I am of the opinion that in the circumstances of the case, when the parties (the buyers and sellers) entered into an agreement with a terminating condition, and when the terminating condition was fulfilled and the agreement was cancelled, then it is not a matter of entering into a binding agreement that entitles the broker to brokerage fees. This is in contrast to a situation in which the parties entered into an agreement that was canceled due to its breach, in respect of which the case law determined that the realtor is entitled to brokerage fees.
- The plaintiff and the defendants entered into a brokerage agreement, the purpose of which was to bring the defendants to enter into an agreement for the sale of the property they owned. The defendants entered into a conditional sale agreement in which they sold the property they owned, but this sale was conditional, and at the end of the day it was not carried out.
The plaintiff is entitled to brokerage fees if he assisted the defendants in selling the property. This is the essence of the brokerage agreement and this is the purpose for which the defendants hired the plaintiff's services. If the defendants did not sell the property, there is no justification for the plaintiff to be entitled to brokerage fees. There is also no justification for the plaintiff, the broker, to be better off than the client's, so that the broker will receive brokerage fees for a transaction that at the time of its conclusion was uncertain to be carried out and that at the end of the day was canceled and not executed.