Am i liable to pay the brokerage even if deal is not completed?
I was planning to buy a house and got into "Agreement to sale (ATS)" through my broker.Now due to some personal reasons i will not be able to buy the house. Seller is fine with this. But my broker if now creating nuisance that we have to pay him the brokerage even though deal is not completed since its withdrawn by me and not due to his fault. He is threatening to go to court specifying a clause in ATS as " It is agreed that both First party and Second Party will give Rs xxx each to their broker XXX respectively as brokerage".
As the deal is not completed, Am i still still liable to pay the brokerage? In ATS , there is no mention about the brokerage in case agreement gets terminated.
Asked 10 months ago in Property Law from Gurgaon, Haryana
1) you are not liable to pay brokerage if deal has not materialised
2) if broker harasses you file police complaint of criminal intimidation under section 506 of IPC against broker
Since brokerages are mostly done unofficially and the terms are set verbally, its breach often raises complicated facts situation.
In your case since you have not proceeded with the purchase anymore, you can avoid buying the proeprty.
Howsoever you may compensate the broker partly for the effort done by him though it did not fall through ultimately.
I would ask you to resolve the dispute amicably.
The brokerage is payable only when the deal is clinched i.e when the sale deed is executed. Let the broker go to court and you can contest his lawsuit in defence.
The brokerage is not depending upon the completion of the deal or terminating the same
The brokerage is to be paid if the services of the broker utilised including showi the property etc.
Therefore negotiate with the broker and terminate his services accordingly.