(JLL was Denied Commissions by Trial Court – Appellate Court Reverses)

Over the last decade, a single broker representing both parties in a transaction has become increasingly common for the sake of efficiency; that is what Jones Lang LaSalle Brokerage (“JLL”) had in mind when it signed up 1441 L Associates L.L.C. to lease its building at 1441 L Street, NW.

Earlier this year, US District Court Judge Florence Pan (District of Columbia.) 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 Associates L.L.C.’s obligation to pay JLL’s $780,000.00 commission. The listing agreement clearly stated that 1441 L would pay the commission and that the brokers were representing both parties.

Judge Pan 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” technically defective under DC Code Sec. 42-1703(i)(2).

The Appellate Court, in a decision released on July 7, 2023, found otherwise, concluding the DC law did not, in fact, require brokers to technically adhere to certain formatting specifications set out in the statute because brokers may still demonstrate that the requisite written client consent for dual representation was present. The case was remanded for some technical findings to award the brokerage fee.

Important Takeaways: Strict adherence to the recommended formatting of brokerage agreements may not always be required in dual representation cases when collecting commissions. Even so, it is good practice to follow the recommended formatting under the Statute to avoid litigation of this sort. Even more important, always consider that the party who is obligated to pay you may not actually pay – KNOW YOUR CLIENT!