(JLL Secured the Tenant but was denied its commission on a technicality)

Over the last decade, brokers representing both parties in a sale has become increasingly common. That is what Jones Lang LaSalle had in mind when it signed up 1441 L Associates L.L.C. to lease up its building at 1441 L Street, NW. 

Earlier this year, Judge Florence Pan (U.S. District Court of DC.) ruled in Jones Lang LaSalle Brokerage Inc v. 1441 L Assoc’s L.L.C. (March 23, 2022) that a rarely enforced law from 1996 completely voided 1441 L’s obligation to pay Jones Lang LaSalle’s (JLL) $780,000.00 commission. The listing agreement clearly stated that 1441 L would pay the commission and that the brokers were representing both parties.

The Court found that the “dual representation consent” was deficient because it was not “on the statutorily approved Sample form, but rather on page 51 of a 65-page lease” and thus was insufficiently “conspicuous,” because it was not in bold face type (“only” in the same font as the rest of the lease agreement), underlined, nor in a “box” as suggested by DC Code Sec. 42-1703(i)(2). The case is now on appeal.

Important Takeaways: Ensure that whoever is drafting your contracts strictly follows disclosure requirements and other aspects of the relevant codes, including recommendations regarding format. Always consider that the party obligated to pay you won’t pay you if they don’t have to. Remember, contracts should always make collection fees and attorneys fees recoverable in enforcement, whether or not the case goes to trial.