Typically the agent is entitled to the commission if they achieve an unconditional sale.
The one issue that I think might have been overlooked is that in this case there was only a $5K deposit. If the agents commission was more than this, the poor seller would have been out of pocket if he'd simply accepted the forfeited deposit and let the purchaser walk away from the contract.
would be good to get to the bottom of this e..g are there state differences? definitely ILLEGAL in WA... here it is str8 from the legislation:
page 56 Reprint 6
(4) The remuneration of an agent for services rendered by him in
his capacity as agent in respect of a transaction he has
negotiated is payable only on settlement of the transaction
Real Estate and Business Agents Act 1978
General controls Part V
s. 61
Reprint 6 page 57
unless there is a failure to settle the transaction and that failure
is due to the fault of the agent’s principal.
(4a) In subsection (4) —
“settlement”, in relation to a transaction —
(a) where the transaction is to be completed by the
payment of the purchase price by way of a single
payment (over and above the deposit), means the
payment of the purchase price;
(b) where the purchaser is obliged to make 2 or more
payments to the vendor (over and above any deposit
paid within 28 days of the execution of the contract)
before the purchaser is entitled to a conveyance or
transfer of the subject matter of the contract, means
the time at which the purchaser is entitled to
possession, occupation or control of the subject
matter or the time at which the purchaser has paid at
least 10% of the purchase price, whichever is the
later, or at any other time as may be prescribed by the
regulations; or
(c) where the transaction is of a kind specified in
regulations, has the meaning prescribed by the
regulations in relation to that kind of transaction;
“transaction” means —
(a) a sale, exchange, or other disposal and a purchase,
exchange, or other acquisition of real estate and any
exclusive right whether deriving from the ownership
of a share or interest in a body corporate or
partnership;
(b) a sale, exchange, or other disposal and a purchase,
exchange, or other acquisition of goods, chattels or
other property relating to a real estate transaction of a
kind specified in paragraph (a); or
Real Estate and Business Agents Act 1978
Part V General controls
s. 61A
page 58 Reprint 6
(c) a business transaction of a kind referred to in
paragraph (a) or (b) of the definition of “business
transaction”,
or both such a real estate transaction and a business
transaction.
(5) A licensee shall not demand, receive, or hold any commission,
reward, or other valuable consideration in contravention of this
section.
Penalty: $5 000.(6) Any commission, reward, or other valuable consideration
received or held in contravention of this section may be
recovered as a civil debt recoverable summarily in any court of
competent jurisdiction.
[Section 61 amended by No. 128 of 1987 s. 89; No. 43 of 1994
s. 11; No. 59 of 1995 s. 10; No. 34 of 1998 s. 15.]