Listing agreements are usually (and certainly should be) for a given period of time, often in the order of six months or a year. While this is reasonable in itself, there may be circumstances in which a seller is not satisfied with the broker`s marketing efforts or other actions of the broker. In such circumstances, the seller does not want to wait until the end of the offer to find another broker. Therefore, the seller should provide a mechanism for early termination of the offer. Ideally, the seller wishes to terminate the offer for any reason or no reason after a relatively short period of prior notification. Similarly, the seller wishes to terminate the offer immediately for an important reason. A broker will often be sensitive to appropriate provisions of this type, especially when the broker is protected from potential buyers on an interest list and is able to incur his expenses out of his own pocket if the termination was made without good reason. 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 rent the property) before making public advertising 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. There are at least three types of listung agreements that can be used in commercial real estate transactions. The first and most common form is the exclusivity agreement. In this type of listing contract, the listing broker is entitled to a commission, even if the owner sells the property without the listing broker being involved. The exclusive sales contract protects the real estate agent`s commission by providing that the seller must pay the broker even if the property is sold by the seller`s efforts or the efforts of another broker without the participation of the listing broker….