Right to a Commission

August 15, 2017 | By Charles Botensten

Q. I was formerly licensed as a real estate salesperson associated with a real estate brokerage company (the “Broker”).  During my association with the Broker, I represented a purchaser of a co-op apartment.  The transaction closed and my Broker collected a commission at the closing.   Two days after the closing, my license expired.  The Broker is now reluctant to pay me my respective split of the commission. He contends that he is prohibited from sharing a commission with me in light of the statutory prohibition against sharing a commission with an unlicensed individual.  Even though I am not currently licensed, am I nevertheless entitled to my respective share of the brokerage commission?

A. Citing the Second Department case Mavco Realty Corp. v. M. Slayton Real Estate, Inc., et al, the Department of State stated that if the salesperson was licensed at the time that she legally earned her commission, then the payment of the commission by the Broker would not violate the statutory prohibition against paying an unlicensed individual.  The key is whether the salesperson was licensed at the time that the services for the claimed commission were rendered.

The Legal Line Question by:
Neil B. Garfinkel
REBNY Broker Counsel

Partner-in-charge of real estate and banking practices at Abrams Garfinkel Margolis Bergson, LLP