Legal Updates

A realtor is entitled to brokerage fees even if a long time has passed since the day it presented the apartment as long as it was the effective factor in closing the deal

September 14, 2022

A realtor showed an apartment to potential purchasers, but two years later they purchased it directly from its owner and refused to pay brokerage fees contending the realtor was not the effective factor in closing the deal.

The Court accepted the claim and held that the realtor is entitled to its brokerage fees as it was the effective factor in closing the deal despite the long time that has passed. In order for a realtor to be entitle to brokerage fees under Israeli law the realtor has to meet certain conditions one of which is that it was the effective factor that brought the parties to enter into a binding agreement. The question of whether the realtor was the effective factor is examined in each case on its merits, considering the circumstances, including: the degree of similarity between the original proposal in which the realtor was involved and the final contract; whether the price offered is the same or close to the price agreed upon by the parties; whether not much time has passed from the realtor’s offer to the completion of the final transaction; the degree of intensity of the realtor’s actions; the existence of an additional factor, which assisted the parties in obtaining the contract and the degree of intervention of that additional factor. Here, the relationship between the parties was established in accordance with the details provided by the realtor soon after the apartment was shown to the potential purchasers by an employee of the realtor. The realtor did not stay silent, but was excluded from the negotiations and was told that it must wait until an agreement is made, without being told what such date may be. In practice, the purchasers did not use another party, with the exception of the lawyers, but waited a long time until a financing was obtained. Because the deal was signed for a similar amount estimated by the realtor in its work order and as it was the effective party to the contract, it is entitled to the brokerage fee even though a long time passed since the date it showed the apartment.