Single-Member Had Authority to Sign Real Estate Listing Agreement; Sales Commission Must Be Paid

Single-Member Had Authority to Sign Real Estate Listing Agreement; Sales Commission Must Be Paid

In a recent case from New Jersey, it was found that the sole member of an LLC had the authority to sign a real estate listing agreement. As such, when the listing agent presented a buyer willing to close on the sale, the commission was earned. The sole member's assertion that he needed to check with the assignee did not change the outcome. Gebroe-Hammer Associates v. West Green Gables, LLC, Docket No. A-0481-18T2, 2019 WL 3428499 (N.J. App. Div. July 30, 2019).

West Green Gables, LLC, had been owned 50% by Jeffrey and Susan. When Susan passed away, her daughters became her assignees; they were never subsequently admitted as members of the LLC. Susan’s brother John served as the Executor of her Estate.

Jeffrey signed a listing agreement with Gebroe-Hammer Associates for property held by the LLC. When a buyer was found, Jeffrey asserted he had told the representative for the broker that “he had to confer with [John] as Susan’s Executor, about the transaction. When Jeffrey eventually contacted [John] several weeks later, Jeffrey said [John] was not interested in being involved in the sale.”

Finding that Susan’s estate and her heirs were assignees, and not members, the court found that Jeffrey “was authorized to act on behalf of the LLC and execute the listing agreement.”

In that the broker had brought a potential buyer who was prepared to close, the commission under the listing agreement had been earned and was due and payable.