02/12/13 - Laserfiche WebLink

Home

negotiating land sale contracts with potential buyers render it a "real estate broker" under Minn. Stat. § 82.55, subd. 19, the City of Ramsey's seeming agreement that it is not a "real estate broker" presents a potential issue should the City seek to turn around and rely on this status as presenting a material breach of the contract and thus valid cause to terminate the contract early without paying the $60,000 early termination fee. The precise wording of the contract may not provide Landform any cover, however, because it simply states that Landform, its employees and consultants are not real estate brokers, rather than stating that the services contemplated under the contract are not services covered under § 82.55, subd..19. In other words, affirming on the one hand that it and its employees and consultants are not real estates brokers is not the same thing as stating on the other hand that the services it will be providing under the contract are not those that require a real estate broker's license. Therefore, it does not seem that the parties contracted around the license requirement of Chapter 82, assuming for the sake of argument that parties have the legal right to do so. In any event, the contract also unequivocally states that Landform is not entitled to any compensation for which a license is required under Chapter 82. This provision is obviously superfluous in that § 82.85 already bars a civil action to recover compensation owed for real estate broker services unless the party seeking compensation is licensed as a broker. The obvious implication of this is that the City of Ramsey is not obligated to pay Landform anything under the Incentive Compensation provisions of the contract, and may very well have a cause of action to recover any sums already paid under these provisions. IV. Conclusions. A. Whether the parties contracted around the license requirement of Chapter 82. The parties did not contract around this requirement. Indeed, the contract affirms the dictates of Chapter 82 by unequivocally stating that "Landform will not be entitled to any compensation for work which requires a license under said Chapter 82." Therefore, any services performed by Landform for which a real estate broker's license is required are not compensable, nor will Landform be able to maintain a law suit seeking to recover compensation for these services. Accordingly, the City of Ramsey is not obligated to make any payments to Landform under the Incentive Compensation provisions of the contract. B. Whether Landform has any viable equitable arguments, e.g., estoppel, to preclude the City of Ramsey from raising Landform's violation of Chapter 82 as a defense in a civil action by Landform to recover under the Incentive Compensation provisions of the contract. Page 6 of 6