Legal Updates

A realtor is entitled to commission only if he had the client sign an order to perform an act of brokerage

January 6, 2019

A realtor introduced a seller to a potential apartment purchaser and a sale purchase agreement was signed. The agreement between the realtor and the seller was oral and set that she is entitled to a commission as customary in the market. Later, the seller denied such an agreement.

The Court rejected the realtor’s claim for fees.  Under Israeli law, a realtor is not entitled to commission unless the client signed a written order to perform an act of real estate brokerage. Only extreme circumstances may justify ignoring the writing requirement. Here, the realtor was the effective party in the act of real estate brokerage and is therefore prima facie entitled to a commission. However, this is precisely the type of cases in which the legislator wished to "punish" realtors for failing to have the client sign an order in writing and thus, despite the frustrating outcome, the realtor is not entitled to any monetary compensation.