In case of a sale not closing due to issues with the property title, who may still owe a commission to the broker?

In the context of real estate transactions, when a sale does not close due to issues with the property title, the seller may owe a commission to the broker if it can be demonstrated that the seller was at fault for those title issues. This situation often arises when the seller has undisclosed liens, easements, or other encumbrances that prevent the property from being sold. When such title defects are the seller's responsibility, the broker may still be entitled to receive a commission as they have performed their contractual duties in attempting to facilitate the sale.

The idea behind this is that brokers typically earn their commission based on the successful completion of a transaction, but if the seller’s actions or lack of disclosure caused the sale to fall through, the broker’s efforts were effectively curtailed by the seller’s misrepresentation or negligence. The commission structure is often outlined in the listing agreement, which may specify conditions under which a commission is still owed, regardless of whether the sale closes.

This understanding highlights the obligation of sellers to provide clear and marketable titles and reinforces the importance of transparency in real estate transactions.