Author(s): Richard K. "Dick" Clark
Published: 03/30/2009
The Colorado Court of Appeals has recently reiterated that a person or company not licensed as a real estate broker in Colorado may not recover a fee for bringing two parties together to consummate a real estate deal. The case is Amedeus Corporation v. McAllister, 2009 WL 4000072 (Colo. App.), decided February 19, 2009. In a well-reasoned opinion by Judge Dennis A. Graham, the Court of Appeals held that the unlicensed individual and his company could not recover a commission despite their argument that they were mere "business consultants" and were seeking a "finders fee," not a real estate commission. Thus the complaint was properly dismissed by the trial court.
Judge Graham added that the unlicensed individual and his company could not recover under the doctrine of quantum meruit or quasicontract because compensation for services is not recoverable where the transaction is forbidden by law. Agreements to recover a fee or commission by an unlicensed person are void ab initio and thus forbidden by law.
This decision encourages those who want to "negotiate" real estate deals to become licensed and thereby be obligated to comply with the continuing education requirements imposed on licensees. Equally important, the opinion underscores the importance for all brokers to maintain their licenses; a lapse in licensing could preclude the broker from recovering commissions earned during the unlicensed period.
Please note that this opinion may become the subject of a request for certiorari review by the Colorado Supreme Court, and if so, we will keep you advised.
Dick Clark is a senior partner at Rothgerber Johnson & Lyons LLP, working in its Denver office. He has served as legal counsel to the Colorado Association of REALTORS ® since 1990 and regularly represents and advises real estate brokers on all legal matters related to their brokerage business. Mr. Clark can be reached at 303-628-9531 or by e-mail at rclark@rothgerber.com.