Court recognises InLand’s right to receive a broker’s fee for real estate transaction

Our dispute resolution team successfully represented InLand, a real estate purchase and sale intermediary, in a civil dispute before the court of first instance and the appeal court over the recovery of broker’s remuneration and late payment interest.

Refusal to pay for services

The seller of the land did not accept its obligation to pay the broker’s fees and did not pay the broker’s invoice on the grounds that the real estate portfolio was not acquired directly by the buyer named in the agreement and purchase contract, but by the person entitled to first right of refusal.

The court’s decision

The court held that, according to the agreement, the obligation to pay the broker’s fee came into force upon the conclusion of the purchase agreement for the relevant real estate portfolio, regardless of whether the right of first refusal was used. In particular, the parties to the transaction did not provide for any additional terms exempting the defendant from the payment of the broker’s fee.

The court emphasised that the exercising of the right of first refusal further confirms the fact that the purchase contract was concluded, since the right of first refusal cannot be exercised before the initial purchase contract has been concluded. The conclusion of the purchase contract cannot be made dependent on the actions of the preemptor, since the purchase contract is concluded before the preemptor makes his choice as to the exercising of the right of first refusal.

In addition, the court noted that the defendant, despite the exercising of its right of first refusal, had sold the real estate portfolio for the purchase price specified in the purchase contract, deriving from that transaction the economic benefit which it had reason to expect under the agreement between the parties. The defendant had thus achieved its aim through the broker services provided by the applicant.

In the light of the above arguments, both the court of first instance and the court of appeal upheld InLand’s claim for recovery of the broker’s remuneration and default interest.

Sorainen team

InLand was represented by partner Andris Tauriņš and associate Artūrs Kazāks.