Plaintiff Feist and Feist Realty Corp., moves for summary judgment against defendant, Dockside Urban Renewal Corp. (Dockside), claiming a broker's commission for having procured a tenant for defendant. Defendant claims that no agreement for a commission was ever made. In this case, I find that since the broker sent a letter to the owner offering a prospective tenant in exchange for a commission and the letter was not repudiated, a unilateral contract was created. The agreement is enforceable since the owner accepted the prospective tenant procured by the broker and negotiated a lease. Thus, the broker is entitled to its commission.
During 1985, plaintiff Feist & Feist Realty Corp. (Feist), sought premises for a tenant, the New York Bronze Powder Company Inc. (New York Bronze). The needs of the prospective tenant included a large industrial and warehouse facility. Feist introduced New York Bronze to a location in Newark owned by defendant Dockside Urban Renewal Corporation (Dockside). After showing the premises, Feist sent the owner a
letter by certified mail, dated December 18, 1985, advising the owner as follows:
For the record, if you are successful in leasing this property to New York Bronze Powder Company and/or to any companies or persons representing said company or aforementioned individuals, the offices of Feist & Feist Realty Corp. will be entitled to a commission equal to five (5%) percent of the gross aggregate rental as provided for in the said lease, plus five (5%) percent of any options, renewals, extensions or taking of additional space, whether on this property or any other property which is owned or controlled by you.
Defendant acknowledged receipt of the letter on December 19, 1985 and commenced negotiations with New York Bronze. These negotiations resulted in a lease dated April 28, 1986. The total amount of the rent was $12,941,250, for a ten year period commencing June 1, 1987. In reference to the broker, the lease provided as follows:
Section 26.16. Brokerage. Landlord and tenant represent that Feist & Feist Real Estate Co. was instrumental in consummating this Lease . . . . Landlord shall satisfy any commissions due to Feist & Feist by a separate agreement.
After the lease was signed, plaintiff made an immediate demand for payment of the commission. Plaintiff claimed it was entitled to 5% of the total rent or $647,062. Defendant sent no payment or written response. From July 1986 to June 1988 Feist sent Dockside six separate letters requesting payment of its commission. Dockside never responded and never objected in writing to any of the broker's requests for a commission. No commission payment was ever made. Then, in September 1988, the tenant defaulted on the lease and thereafter filed for bankruptcy.
I first consider the well established principle that when a broker is engaged by an owner of property to find a purchaser, the broker earns a commission when the broker produces a ready, willing and able purchaser who enters into a contract with the owner and the transaction is completed by a closing of title. Ellsworth Dobbs, Inc. v. Johnson, 50 N.J. 528, 551, 236 A.2d 843 (1967); Blau v. Friedman, 26 N.J. 397, 140 A.2d 193 (1958); Bruni v. Posluszny, 56 N.J. Super. 525, 153 A.2d 739 (App.Div.1959). If, however, title closing does not
occur because of lack of financial ability of the buyer or because of some other buyer default, the broker has no right to a commission. Ellsworth Dobbs, Inc. v. Johnson, supra, 50 N.J. at 551, 236 A.2d 843; Kennedy v. Roach, 122 N.J. Super. 361, 364, 300 A.2d 570 (App.Div.1973). The "crucial time" at which the broker is entitled to a commission is ...