Ramat Gan Home Sellers Must Pay Broker 250K Shekels Despite Sale After Exclusivity Period
A couple who sold their home in Ramat Gan for 10.5 million shekels will have to pay their real estate broker approximately 250,000 shekels in commission, even though the sale occurred after the broker's exclusivity period had ended. In January 2023, the couple signed a brokerage agreement with a six-month exclusivity clause. Three months later, they agreed to sell the house for over 11 million shekels, but the deal was canceled because the buyers could not sell their own home to finance the purchase.
In February 2024, after the exclusivity period expired, the couple resumed negotiations with the same buyers and finalized the sale for 10.5 million shekels. Before signing this new agreement, the broker filed a lawsuit claiming entitlement to commission from the first deal, which was ultimately canceled, arguing that the sellers violated the exclusivity agreement. The broker also sought an additional 50,000 shekels for damage to his reputation.
The couple argued the broker was not owed commission for either deal since the first was canceled and the second occurred after the exclusivity period and was not mentioned in the lawsuit. The Herzliya Magistrate Judge Eilat Harnof ruled that while the broker was not entitled to commission on the first canceled deal, he was entitled to commission on the second sale. The judge reasoned that the second contract was a direct continuation of the first agreement made during the exclusivity period, placing the broker within the "magnetic field" of exclusivity. However, the judge rejected the broker's claims for additional compensation and reputational damages.
The court ordered the couple to pay the broker 2% commission plus VAT on the second transaction, totaling 247,800 shekels, along with 15,000 shekels for legal expenses and attorney fees. The broker was represented by attorney Nadav Dreznin, and the couple by attorney Tal Roznovser. The case highlights the legal complexities of brokerage exclusivity agreements and their impact on subsequent sales with the same buyers.
