Glossary / Commissions and splits
Also known as: Proximate cause (of a sale or lease)
Procuring cause is the principle used to decide which broker earned a commission when more than one claims it. Generally, it is the broker whose efforts started an unbroken chain of events that led to the completed deal. How it applies varies by state and by contract.
Black's Law Dictionary, as quoted by the Greater Metropolitan Association of REALTORS, defines procuring cause as "the cause originating a series of events, which, without break in their continuity, result in the accomplishment of the prime object." NAR describes it as "the uninterrupted series of causal events which results in the successful transaction" and lists factors such as the first contact with the client and whether the broker's efforts continued. NAR stresses that "one factor alone will not decide a case." For REALTOR members, disputes go to mediation and then arbitration through the local association.
Courts apply their own tests. According to Adam Leitman Bailey, P.C., New York courts look for a "direct and proximate link, as distinguished from one that is indirect and remote." USLegal notes that merely informing a prospect about a property may not be enough, and that the precise definition "depends on state law and the facts and circumstances in each case." This is not legal advice.
When two brokers claim the same tenant, procuring cause can decide whether you are paid at all, and a dispute can hold up a commission while it is resolved, depending on the agreements involved. Writing about Illinois law for Novack and Macey LLP, Monte Mann notes that in court "it is the broker's burden to prove that he or she was the procuring cause," using correspondence, marketing materials, and testimony. Your Commission agreement may also define entitlement directly, which can matter more than the general rule.
Document every introduction, tour, and negotiation in writing, because the record is what proves you started the chain.
