Most listing agreements require the owner to give some degree of “guarantees” about the property, the condition of the property, the status of the owner, etc. While these provisions may be understandable, legibility agreements are sometimes too broad and painful. Overly broad warranty requirements could expose the owner to liability, so limiting the requirements of these provisions would be beneficial to the owner. Certain legal conditions must be met for a listing contract between the owner of the property and the broker to be valid. The first and most important step is for the parties to conclude a written agreement on the implementation. Beyond the practical usefulness for both parties to recall an agreement in a written document, a broker must have a written listing agreement to be able to bring an action for reimbursement of an unpaid commission. Minn. Stat. § 82.85, Sub-d. 2.
In addition, brokers must obtain a signed listing agreement (or other signed authorization from the owner of the property or a person authorized to sell or lease the property) before making public publicity for the property to be available for sale or rent. Minn. Stat. Article 82.66, subparagraph. 1(a). The next steps needed for a valid and enforceable listung agreement are in Minn. Stat described. Article 82.66, subsection 1(b) which requires that the written agreement of the list include in particular: (i) a specified expiry date; (ii) a description of the immovable property concerned; (iii) the list price and all conditions required by the seller; (iv) the amount of any compensation or commission or the basis for calculating the commission; (v) a clear indication of the events or conditions giving the broker a commission; and (vi) information relating to a non-enforcement clause, including a statement that the non-enforcement clause is not effective, unless the broker provides the seller with a written backup list within seventy-two hours of the expiration of the listung contract.
The Minnesota Supreme Court has ruled that compliance with legal requirements is sufficient. Rosenberg v. Heritage Renovations, LLC, 685 N.W.2d 320, 325 (Minn. 2004); Reuben v. Gibbs, 297 Minn. 321, 323, 210 N.W.2d 857, 858 (Minn. 1973). Please note, however, that a broker cannot claim compensation according to quasi-contractual or implied contractual theories in fact, with respect to the legal requirement of a written agreement to recover compensation. Krogness v. Best Buy Co.
Inc., 524 N.W.2d 282, 286-7 (Minn. Ct. App. 1994); Cambridge Commercial Realty, Inc. v. Brooklyn Hotel Partners, LLC, 2014 WL 1272451 at *4 (Minn. Ct. App. 2014). The key for all parties is to ensure that there is a written and signed listing agreement.
Perhaps the most difficult provision to negotiate in a listing agreement is the determination of compensation. The broker does not wish to be held responsible for anyone in its efforts to market the seller`s property. As a result, many listing agreements contain a very broad indemnification provision that requires the seller to compensate the broker if claims are made against the broker in any way in connection with the real estate or the broker`s efforts to market the property. While this is understandable from the broker`s point of view, the seller will not want to be responsible for the behavior of anyone other than his own and the seller will only want to be liable for his behavior, which is negligent or contrary to his obligations in the legibility agreement or constitutes a failure of his obligations. Too often, for the first time, clients hire a lawyer for a commercial real estate transaction when they want to make an offer to buy real estate or after receiving an offer to sell real estate. Nevertheless, there is one important step in the process, which is often overlooked – the revision and negotiation of the listing treaty. . . .