legal partnership?

I'm a real estate agent working full time in the industry for over 25 years. I brought a newly licensed agent into the agency that I work for which resulted in working together on three transactions. I provided all the marketing materials and allowed this agent to secure customers through sitting open houses on my listings. This agent is now suing me for an entire years worth of commissions maintaining we had a partnership that didn't exist. There was nothing in writing and the broker who paid the commissions knew nothing of a partnership. Am I legally bound by an implied partnership that is one sided?

Hi BarbaraRE,

Partnerships are by definition “agreements”. If there is no documentation of a partnership, it comes down to whether the other agent can prove that you agreed to a partnership. Usually that can’t be done if you say one thing and they say another, and there are no documents showing one of you is right and the other is wrong. I also think there are restrictions on someone claiming a verbal agreement for which there is no documentation and that cannot be collaborated by the other side.

Since they are suing you, you will need a lawyer regardless. Ask that lawyer what your liability is. It sounds small, but with a lawsuit in front of you, you must take it seriously.

Good luck and let us know how it goes!

Hi BarbaraRE,

You imply you had shared commissions on the first three.You didn't mention if this other person sat out all of your open houses "for you" for an entire year. Did any sales result from their time spent? Shared commissions?

If so, by initially taking this person in as a "partner" in your transactions and allowing them to continue on as a co-operative it may be that the other person feels they are justified in sharing of all the commissions. No one works for free.

If the Broker has paid the other person a part of these commissions again it will substantiate some sort of collaboration has been established. (Implied Consent recognized by all)

There must be a reason they feel they are entitled to a "years" worth of commissions.

It's definately time to clear the air regarding any co-op you two might or might have not.

We all know, "Get it in writing"

Thank you for taking the time to respond.

This other agent sat a limited few open houses for about two months which did not result in any "sales". The transactions that were shared were a direct result in my ability to market this agents one listing effectively and follow thru with the buyer to its destination of settlement. This agent conveniently went out of town once the work commenced, hence, I earned my half of the commission. The second sale was from a client that this agent secured from an open house from this agents previous listing. Once again, I covered for this agent and saw the transaction to completion. The third listing was from a mutual friend and I felt it only fair to split the commission although I had marketed the property and procurred a buyer.

Agents work with other agents all the time. Agents in my office come to me alot asking to sit my listings for the exposure and ability to find new clients. I don't have any obligation in paying people for that service but only hope they can sell the property and we can all profit. I've certainly paid my dues when I first entered the business and I DID work for free.

I cannot legally pay anyone a commission. It's against the law of agency in the real estate business. If there was a partnership in the true sense of the word, the broker would have to be notified and a copy of the agreement on file for the state when audited.

I guess it's anyone's right to sue for anything. I have learned a valueable lesson in not being so generous with my time, expertise and abilities. Unfortunately, it's a no win for everyone except the attorneys.

Sounds like you have a tough nut to crack here. Your absolutely right, people sue for anything nowdays. To bad too.
Perhaps you can forego the court situation by one on one communication with the other party explaining your side in a manner they can relate to? Perhaps your Broker will sit in and provide some widom or mutual resolution.
Perhaps your contiued expertise can better guide this newby in how your profession is dedicated to scratching each others back for the good of all?
I've seen this type of situation before where the Broker has paid out commissions to both parties on the word of one of the concerns. It happens. We all know the Broker is more concerned about bottom line than how it got there. Honestly, of course.
Without evidence of shared commisions or an agreement signed or witnessed, it doesn't sound like you'll have much trouble prevailing but it is still a hassle.
If you can't work this out and the amount they're demanding is significant, get counsel.
Good Luck!
Ps. I remember the early times when my son struggled through getting into RE. There were pretty lean times in the beginning. It's a tough profession, and he was fortunate enough to have some good guidance from some great people. Realtors are worth every penny they earn.