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Court Report

Florida broker can’t collect Ohio commission
In 1984 Developers Diversified, an Ohio real estate developer, and Florida-based Landmark Commercial Realty signed an exclusive brokerage agreement for several Florida markets. In 1990 Developers asked Landmark to do site selection work in Ohio. Landmark worked on the Ohio project for six months and ultimately sold 16 acres for Developers. When Developers refused to pay a commission, Landmark brought a suit in federal court.

The court ruled that Landmark wasn’t entitled to a commission because it wasn’t licensed in Ohio, but the jury awarded Landmark $150,881 for the reasonable value of its services.

On appeal, Developers argued that Ohio law barred Landmark from seeking compensation in this case. The Ohio code states that no real estate broker may bring an action for compensation without proving that it was licensed as an Ohio real estate broker or a “foreign real estate dealer.”

During the suit, Landmark obtained a foreign real estate dealer’s license. However, the appeals court ruled that the license did not permit Landmark to broker deals in Ohio. Further, it said that the foreign license was irrelevant, since Landmark was not licensed in Ohio at the time of the transaction. Thus, Landmark was denied compensation.

Landmark Commercial Realty Inc. v. Developers Diversified Ltd., 163 F.3d 389 (6th Cir. 1998).

Adapted from The Letter of the Law, NAR’s online legal newsletter, part of One Realtor Place^®.