own services, serve as the basis for a valid commission claim,
in addition to your own claim. Should you, in exchanging a
waiver and affidavit, take on liability, even worse, perhaps
provide indemnity against such a claim? Take another look at
that Broker Affidavit.
First, absent language in your own fee agreement, there is
no obligation to give an affidavit, or a warranty, or even a
representation to the best of your knowledge. None of the 32
lien acts require such an affidavit. One seasoned title officer
explained to me:
"When I pay a fee and insure against broker lien, I go on a
broker witch hunt, to make sure that I smoke out and have
recourse against the recipient of the fee – for any other claims
for commissions on that deal."
In my opinion, you have no statutory obligation to provide
the affidavit, meaning nothing in the statute requires you to do
so. If any party or parties should be required to give such a
warranty, it is the parties to the deal, those who benefit from the
title insurance being provided.
In two very recent deals, my clients were asked to give such
an affidavit; and even though the title insurer (and Receiver)
grudgingly admitted to me that they had no legal basis for the
requested affidavit, they nonetheless insisted on one. Is there
some middle ground, you might wonder, hopefully. You want
your fee, and you don't see any risk. Consider alternatives.
Here is the affidavit that I tailored for each of these situations,
just to satisfy the title officer and court appointed receiver who
wouldn't disburse the fee without some form of affidavit:
"_____________ represents that he/she is authorized to bind
Broker and further represents to the best of his/her actual
knowledge that Broker is entitled to $_____ for the sale/lease
of property commonly known as [address] from _________
[Landlord/Seller] to _________[Tenant/Buyer]."
As you review the brief statement above, consider what you
would warrant is merely your authority to bind your firm and
to state the full amount of the fee your firm is owed.
If pushed, you could add:
"To the best of the actual knowledge of the undersigned, only
______ [Cooperating Broker] is entitled to commission on the
Again, your representation (never a warranty) is based only on
the actual knowledge of the person signing, not on any other
broader scope of liability.
I recommend the following when asked for completion
of that so-called standard form of waiver:
1. Limit it to a waiver only.
2. Waive only your firm's rights to a fee.
3. Condition the waiver upon payment.
4. Make no warranty.
5. Make no representations or limit the representations
to the signing party's actual knowledge.
6. Think twice before accepting a so-called
standard form while your check sits on the desk
exchange for that form.
Yes, those calm waters just might contain a shark, or a
title officer on a broker witch hunt, or at least a shoal or
Discover Industrial Leaders.
221 E 4th St., Suite 2600, Cincinnati, OH | 513.421.4884
Discover Cincinnati • Northern Kentucky Expertise.
• Sold 600,000 SF in Erlanger, KY for $25 million
• Leased 520,000 SF in Hebron, KY for $7 million
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A partner of Arnstein & Lehr LLP
law firm, Hochman practices
law for a wide range of clients
in real estate transactions and
real estate related litigation.
He also consults for SIOR and
NAR on important legislative
issues including broker lien
rights and license portability.
Hochman writes freelance
articles offering some of his best advice based on
his 36 years of experience. Jim can be reached at
ABOUT THE AUTHOR