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Thursday, March 10, 2005

Cases: Contract with unlicensed broker is void

Georgia_flag A real estate commission contract with an unlicenced broker is void as against public policy in Georgia and the broker cannot recover under it, according to the U.S. Court of Appeals for the 11th Circuit,

The broker, WorkPlace U.S.A., Inc., was owned by a licensed broker, John Amend, but was not itself licensed.  It entered a deal involving 300,000 square feet of space for WorldCom, Inc. After WorldCom’s "massive accounting implosion," WorkPlace was tossed out when it refused to agree to a reduced commission. It sued.

Georgia law requires real estate brokers to be licensed, said the court in a per curiam opinion, and an unlicenced broker cannot bring an action to collect a commission. Even in such cases some relief might be found if the illegality is severable from the remainder of the contract, but here, said the court, there was a single promise and a single consideration, and thus nothing to be severed.  The court reserved judgment on a quantum meruit claim, noting that the question on whether that remedy is available in such cases is presently before the Georgia Supreme Court.

Amend v. 485 Props., LLC, No. 04-14635, 2005 U.S. App. LEXIS 3586 (11th Cir. March 3, 2005)

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