Term Estate include Trust Estate?

[vkbarefoot]

What is the name of your state? CA

For the purposes of CPC 10160, 10160.5 and 10161, regarding the payment of real estate commissions on the sale of property, can the "estate" also include a "trust estate?"

In other words, do these sections apply to trust estates as well as other types of estates.

Thank you .... Viki

 

[tranquility]

I don't think those provisions mean what you think they mean and I'm not sure what you mean by "trust estate", but Black's define an estate as:

"3. The property that one leaves after death; the collective assets and liabilities of a dead person."

and a decedent's estate as:

"The real and personal property that a person possesses at the time of death and that descends to the heirs subject to the payment of debts and claims."

Since that probably doesn't help, why don't you give a brief description of what is happening so someone can give a better answer?

(e.g. Dad had a house in a family trust with me as the beneficiary and trustee on his death. A broker came to me saying he had a buyer. I told him OK and sold him the house. Do I owe him a commission?)

 

[vkbarefoot]

About the commission paid

Residential trust property was sold to a party that became interested and made an offer on the property (via a purchase agreement) prior to the trustee entering into an agency agreement with a broker they refer to as the Sellers Agent.

The buyer of the property, who was a real estate broker, had an agreement with the trustees that he would receive no commission on the purchase of the property if no other agent received a commission. if 10161 etc. applies then the trustees were barred from paying that commission.

The trustees signed an agency agreement with a selling agent on the day the purchase agreement was accepted. They then paid their selling agent a full commission. This meant that they then had to pay the buyer a full commission. (It should be mentioned here that the selling agent lives threes doors down for the trustee and they have been friends for years.) If 10161 etc applies then the trustees cannot pay a real estate commission to a selling agent that did not produce the purchasers bid.

In their interrogatories they state that the payment to the selling agent was for "consultation in connection with the entire process of opening an escrow and closing the sale of real property ... including compliance with laws and regulations ...."

A company name HelpUSell provides services from minimal consultation to providing complete agency to buyers and sellers. For the consultation services used here HelpUSell would have charged $3,000. The trustees were informed of HelpUSells services by myself at the time that the purchaser submitted his purchasing agreement.

The trustees defend their actions of paying the commission by stating that things "might" have happened which required the assistance of the agents.

I want to know if the cited codes apply to the trust estate as well as an "estate."

Thank you .... viki

 

[tranquility]

Much better. Very unusual facts, but better. (I still don't really know what's happening, but I see your argument.) When I take a quick glance at case law I don't see anything directly on point. That's probably why you are in litigation. Everything can be distinguished. Generally, I'd *guess* that if the property-holding trust was revocable before death, the statutes would apply. If it was a true "qualified residential trust", hence irrevocable, it would be entirely outside of the estate and the statutes would not apply.

In the quick scan of cases, it doesn't seem as though the brokers don't get a commission, it's just that the court will set the "reasonable" amount. Also, it seems like a sale was made and consumated. Did the trustee need permission from the court to make a sale and not get it? If the statutes apply and this is in the estate, some money would probably be owed to the broker.

My understanding of when these statutes usually apply is when a person makes an agency contract for sale before death.

 

[vkbarefoot]

Thank you, that's very helpful.

I guess, in a nutshell, I have four questions.

1. When the probate code is referring to an estate does that include the property that is in a trust.

2. Does a real estate agent need to participate in the solicitation and/or signing of the eventual buyer of the property to get a commission.

3. Can an agent receive a full commission on the property for providing consultation services?

4. Does the fact that the buyers agent was willing to forego his commission if no other commission was paid have any effect on the trustees choosing to pay a commission for consulting services? The trustees were given the name of a national, reputable broker that was willing to provide the necessary consulting services for $3000.

The trustees eventually paid $18,000 in commissions.

Thanks again ...viki

 

[tranquility]

I don't have citations for any of your questions without research, so take my answers for what you will. Your situation is complex and there would need to be a lot of time spent developing the facts (reading the trusts, agency agreements etc.) before one could even start to give a good argument which would stand up. Bottom line, I'm sure I don't *know* the answer beyond the fact that there probably isn't an answer until the court decides, or you settle.

1. When the probate code is referring to an estate does that include the property that is in a trust.

There are too many assumptions I'd have to make to give more here than I already did. Even then there are assumptions made.

2. Does a real estate agent need to participate in the solicitation and/or signing of the eventual buyer of the property to get a commission.

Again we have a problem with the facts and the imprecision of language. Legal jargon is a shorthand. You aren't using the shorthand so communication is difficult. One case I read had this as an issue and the answer was no, a commission was owed. That does not mean what you ask cannot be distinguished from the case to find a different result. The facts were nowhere near the same as you have mentioned so far.

3. Can an agent receive a full commission on the property for providing consultation services?

If the statute does not apply, then yes. If the statute does apply, then they deserve a court-decided "reasonable" compensation.

4. Does the fact that the buyers agent was willing to forego his commission if no other commission was paid have any effect on the trustees choosing to pay a commission for consulting services? The trustees were given the name of a national, reputable broker that was willing to provide the necessary consulting services for $3000.

This question gets to entirely different issues. This gets down to the both the fiduciary duties of the trustee and what a reasonable compensation would be.