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P&M Equities, Inc., d/b/a Re/Max N.O. Properties v. Latter & Blum: Board Arbitration Award Upheld by Louisiana Court

A Louisiana court recently upheld an association arbitration award. Believing one of its subagents was the procuring cause of a sale, not the buyer broker who had received a commission, the listing broker requested arbitration and prevailed. The buyer broker then filed with the court a motion to vacate, modify and correct the arbitration award. The buyer broker contended that the board, the New Orleans Metropolitan Association of REALTORS® ("NOMAR") did not have jurisdiction over the dispute, claiming that the arbitration request was not based on a contractual dispute as required by NAR’s Code of Ethics.

NOMAR, permitted to intervene on behalf of the listing broker, argued that the matter did involve a contractual dispute. By advertising the listing in the MLS, the listing broker had made a unilateral offer of cooperation and compensation to cooperate in the transaction; the buyer broker accepted this offer when he showed the home to the buyer. NOMAR also argued that the dispute was an arbitrable issue pursuant to NAR’s Arbitration Manual. In addition, as NOMAR pointed out, just because the buyer broker had entered into a buyer representation agreement with the buyer, that did not mean he automatically was entitled to share in the commission. Any right to a commission on the buyer broker’s part is dependent on his being a procuring cause of the sale, just like any other cooperating broker.

The court found that NOMAR indeed had jurisdiction to address the matter and since a proper arbitration hearing had been held, it upheld the award and entered a judgment against the buyer broker in the amount of the award.

P&M Equities, Inc., d/b/a Re/Max N.O. Properties v. Latter & Blum, 692 So. 2d 1255 (La. Ct. App. 1997).