Couple Must Pay $33,000 in Broker Fees After Losing Lawsuit

A couple who purchased a home has been ordered by a court to pay $33,000 in brokerage fees and legal costs to their real estate agent, after claiming they were misled and that the agent withheld crucial information. The Petah Tikva Magistrate's Court ruled last week that the couple must pay the full commission, plus expenses, for the property transaction. The court rejected the couple's claims that the agent concealed information regarding building code violations and defects in the property. The commission amounted to approximately $25,000.

Four years ago, the couple signed a brokerage agreement for a semi-detached house, agreeing to a 1.5% commission plus VAT. They eventually purchased the property for $1.65 million. The couple alleged the agent intentionally misled them, acted in bad faith, and hid significant planning information, including that a unit on the property, used as a storage room, was built without a permit and in violation of the lease agreement. They also claimed the house was presented as having seven rooms when it only had five, and that the agent drafted legal documents for them, violating the Brokers Law.

The agent's attorney, Uri Skoza, argued that his client acted in accordance with all her legal obligations. The court found the agent to be the "efficient cause" of the deal and ruled she acted lawfully. Evidence showed the agent had informed the buyer via WhatsApp before the initial viewing that "there is some unit there that is not approved." Judge Zahava Eldar stated the agent provided the couple with all information received from the sellers and was not obligated to conduct independent investigations.

The court determined the couple was aware of the building violations before signing the purchase agreement, as explicitly stated by the agent prior to the property viewing. Judge Eldar concluded, "The defendants chose to enter into the transaction with the sellers with their eyes open and taking the associated risks, as the property appealed to them and suited their needs, and it is evident that they wished to enter into the transaction at any price." The ruling noted that the husband confirmed in testimony that the couple later sold the property after renovations to a third party for $1.85 million.

The court ordered the couple to pay the agent the full commission of approximately $25,000, along with $8,000 in attorney fees and expenses.