One Denver realty company is accusing another of stealing its commission following the sale of a $7.3 million mansion south of the city.
The dispute has its origins in 2018, when the real estate agent Christy Owen of Kentwood Real Estate helped McKay and Nina Belk buy a $2.1 million home in Cherry Creek.
McKay Belk is an heir to and the former president of Belk department stores, which is based in North Carolina, and a former Coca-Cola board member. He and his wife are philanthropists who operate youth programs at their ranch in Norwood, a town in southwest Colorado.
“Because of Owen’s exceptional service to the Belks in connection with their purchase of the 400 Milwaukee property, the Belks gained trust in Owen and planned to hire Owen for all their future real estate sales and purchases,” according to a lawsuit filed on Oct. 7.
This summer, the Belks decided to sell 400 Milwaukee St. and move to another home. But when they called Kentwood, the company led them to believe that Owen had retired. In reality, she had only changed employers, to Urban Market Partners, according to that latter firm.
This became apparent when the Belks made a courtesy call to Owen in June, last week’s lawsuit alleges. After learning she hadn’t retired, they hired Owen to find them a new house. By August, the couple had decided on East Willamette Lane in Greenwood Village.
Just across from the Glenmoor Country Club, that five-bedroom, seven-bath, 12,000-square-foot mansion was bought for $7.25 million. Coincidentally, the seller’s agent was Kentwood.
“Owen represented the Belks for months before the Belks decided to purchase Willamette Lane,” Urban Market alleges in its legal complaint. “Owen was therefore stunned and shocked to receive a letter from Kentwood, dated Aug. 22, on the eve of the closing of the Willamette Lane property, challenging her right to the commission she had plainly earned.”
“Kentwood presently retains Urban Market’s commission,” the latter firm went on to say, “and intends to permanently deprive Urban Market of its commission.”
Urban Market is suing Kentwood for theft of its $203,000 commission, along with fraud and breach of contract. It is also suing the Kentwood agent Soley Maria Bogadottir, who it accuses of intentionally misleading the Belks about Owen’s retirement, for fraud. Bogadottir wanted — and ultimately got — the Cherry Creek listing for herself, according to Urban Market.
“This matter is a commission dispute, which is typically handled by arbitration through the Realtor Association,” Kentwood CEO Gretchen Rosenberg said in an email. “It has been Soley and Kentwood’s intent to file a request for arbitration rather than litigate the matter.”
Rosenberg said the money is sitting untouched in an escrow account until a resolution is found. She and Kentwood believe that Bogadottir is owed a commission because she showed the Belks several homes, including the mansion they bought. Urban Market disputes that.
“Furthermore,” Rosenberg added, “Many of the facts alleged in the complaint are inaccurate and our position will be vigorously defended in our request for arbitration at the association and in any future litigation.”
Urban Market is represented by attorney Tracy Ashmore with Robinson Waters & O’Dorisio in Denver, who declined to discuss the Kentwood case with BusinessDen.
Full story via BusinessDen
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Originally Published:
In an unparalleled tug-of-war, brokerages are battling over a tantalizing six-figure commission that stems from the seven million dollar mansion sale. The mansion located in one of the city’s most prestigious neighborhoods was sold to an anonymous buyer. The ensuing dispute hinges on who gets to have their piece of the pie from the million-dollar transaction.
The intriguing legal battle began when brokerage firm A claimed that it was rightful to the commission as it was the one that brought in the buyer. The firm argued that they scheduled and facilitated the house tours, negotiations, and essentially made the deal possible. This claim, though, did not sit well with brokerage firm B that had listed the property for sale. They claimed that since they were the ones who marketed the property, maintained the seller relations, and put in the hard work to arrange the sale, they should be the rightful recipients of the mammoth commission. Escalating the fight, both firms have now engaged their legal teams to make sense of this tangled financial web.
Such issues are explained under a concept referred to as procuring cause, which determines which broker essentially caused the buyer to purchase the house. Firms can claim compensation if they demonstrate that they commenced an unbroken chain of events leading to the transaction. However, applying the procuring cause is not cut and dry and is subject to interpretations, thereby making this law susceptible to disputes.
Making the situation more complex is the fact that most of the communication involved in the sale was informal. Hence, it’s difficult to trace who initially triggered the buyer’s interest in the property. Given the enormous amount of commission at stake, the brokerage firms are leaving no stone unturned to establish their claim.
Disputes of this sort aren’t uncommon in the real estate industry, generally resolved behind closed doors where the brokerage firms negotiate and split the commission. However, the impasse has become increasingly complicated in this case due to the substantial amount involved, prompting the real estate firms to battle it out in the court.
While the financial stakes are indeed high in this dispute, it is equally vital to consider the reputations of the brokerage firms embroiled in the legal battle. Their ability to resolve this dispute amicably and professionally will undoubtedly shape their industry image and could potentially impact their capacity to attract premium clients and high-end properties in the future.
Most importantly, this case serves as a stark reminder to all in the real estate industry- the importance of clarity in communication, adhering to professional ethics, and having comprehensive contracts. All of which could potentially prevent such disputes from arising.
As these two powerhouses continue their legal warfare, the resolution to this controversy might set new precedents in the interpretation and application of the procuring cause in the industry. Regardless of the outcome, this conflict underscores the high-stakes, complex nature of the real estate market – a sector where seemingly straightforward property sales can lead to protracted, intricate disputes over spoils.
In conclusion, the six-figure commission from the seven million dollar mansion sale vividly highlights the volatility and competitiveness in the real estate brokerage industry. It emphasizes the need for explicit communication and comprehensive contracts to minimize potential disputes, safeguarding the brokerages’ interests and by extension, their clients’.
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Brokerages fight over six-figure commission from $7M mansion sale
