“[Saint] Cecelia You’re Breaking My Heart” (By Not Paying My Commission)

by:  Peter J. Gallagher (@pjsgallagher) (LinkedIn)

House + money (pd)If you are a realtor and you enter into an exclusive agreement to find tenants for your client's property, but then your client enters into a rent-free lease with a tenant, do you still get a commission? The answer, at least according to the Appellate Division in Century 21-Main Street Realty, Inc. v. St. Cecelia's Church, is no. 

In Century 21, plaintiff entered into an exclusive listing agreement with defendant, a church, under which  plaintiff would list an "inactive school building," which the church owned, for either sale or lease. Under the agreement, plaintiff was entitled to a commission equal to 6% of the sales price, if the property was sold, or one month of rent, if the property was leased. During the term of the agreement, the church entered into a lease with the local school board, which allowed the board to use the building "rent free" for the first 26 months. It also contained two, six-month "hold over terms." If the board continued to occupy the building during either or both of these terms, it would have to pay the church $900,000 per term. The lease also required the board to repave the parking lot, and allowed, but did not require, the board to make any repairs or renovations to the building that it saw fit, at the board's expense.

Two months after the church signed the lease, plaintiff demanded a commission based on the "asserted costs" of the repairs the board intended to make to the building. It asserted that it was entitled to a commission equal to "two month's rent due based on rental, repair evaluation." Apparently, plaintiff assumed the repairs would costs $1.5 million, divided that amount by the 26-month term of the lease to come up with the per-month cost of the repairs, and then claimed that it was entitled to two month's payment as its commission. The church refused to pay any commission and plaintiff sued. 

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Is A Locked, Fenced-In Parking Lot A “Structure”? It is in New Jersey.

by:  Peter J. Gallagher (@pjsgallagher)

I was in law school during the Bill Clinton/Monica Lewinsky drama. When the pundits seized on Bill Clinton's grand jury testimony about what the "meaning of 'is' is," I recall one of my professors saying that lawyers make distinctions like that every day. In practice, I have learned that this is true. At depositions and in court, lawyers often argue over the meaning of certain words that most people would think are fairly uncontroversial. Sometimes these arguments are more for the sake of argument than anything else, but often they are crucial to the issues in the case, like in the recent New Jersey Supreme Court decision in State v. Olivero.

In Olivero, defendant was convicted of third-degree burglary for stealing metal printing rollers used in printing presses from a fenced-in lot that was adjacent to a warehouse. Defendant and his brother cut the chain and padlock that secured the fence around the lot before driving in and taking the rollers. Unfortunately for them, a security guard noticed that the chain and padlock had been cut and called the police, who arrested defendant and his brother as they attempted to drive out of the facility.

Under New Jersey law, "A person is guilty of burglary if, with purpose to commit an offense therein or thereon he . . . enters a structure." A "structure" is defined as "any building, room, ship, vessel, car, vehicle or airplane, and also means any place adapted . . . for carrying on business." At trial, defense counsel argued that defendant could not be found guilty of burglary because the lot was not a "structure." The trial court rejected this argument, holding that the fenced-in area was "a prohibited space not open to the public, as well as a place for carrying on . .  business." The Appellate Division affirmed, noting that the lot was secured from the public.

Continue reading “Is A Locked, Fenced-In Parking Lot A “Structure”? It is in New Jersey.”