Court dismisses broker's fee claim in property transaction case

In a recent civil court case, the role of a broker in facilitating property transactions came under scrutiny. The court dismissed the plea of Shailesh Kamani, a resident of Ghatkopar, who sought a fee of Rs3 lakh from a property owner for allegedly brokering a deal in 2012. The court's decision was based on the fact that the property owner did not sell the Deonar gala, valued at Rs1.1 crore, to the party introduced by the broker. Instead, the property owner sold it to a third person.

The court emphasized the nature of a broker's role, stating that their objective is to convince both the vendor and purchaser to reach an agreement on the sale of a property. Only upon the completion of the transaction does the agent become entitled to claim remuneration for their services. In this particular case, since the transaction did not materialize and was abandoned by one of the parties, the court ruled that the broker could not assert a right to recover charges.

The court further clarified that facilitating parties to arrive at a compromise cannot be considered as part of the broker's duties. The broker's entitlement to compensation is contingent upon the successful completion of the transaction, not on any efforts made to bring the parties to a compromise.

Additionally, the court highlighted that the transaction between the buyer and the purchaser had failed, leading the purchaser to file a lawsuit before the Bombay High Court. It emphasized that while the plaintiff (Kamani) claimed to have fulfilled his duties as a broker for the initial transaction, it had not reached a conclusive agreement between the defendant (Valerian Noronha) and the purchaser (Ganesh Kamath).

This court ruling sheds light on the legal obligations and limitations of brokers in property transactions. It establishes that brokers can only claim remuneration once the transaction has been successfully completed, and their role is primarily focused on bridging the gap between the vendor and purchaser. The court's decision serves as a reminder that brokers' responsibilities do not extend to mediating or ensuring compromises between parties, but rather to facilitating the sale itself.

This case serves as a precedent for similar disputes in the future, providing clarity on the criteria for brokers to assert their entitlement to fees. Brokers must demonstrate the successful completion of a transaction as a prerequisite for claiming compensation, and they cannot rely on their efforts to bring parties to a compromise as grounds for remuneration.

Next (MahaRERA warns builders against violating sanctioned plans and exploiting Covid-19 moratorium)

Court dismisses broker's fee claim in property transaction case

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