Mr. Levy served as a rental broker. His friend, Mr. Halperin, owned a unit in a bungalow colony that he would rent to families who came on vacation for a week or two.
“I have a potential renter for the last week in August,” Mr. Levy said to Mr. Halperin, “but he wants a 15 percent discount on the regular rate.”
“That’s too much,” replied Mr. Levy. “At most I would reduce by 5 percent.”
After going back and forth, Mr. Levy got the two sides to agree on a 10 percent discount, and they called it a deal.
Two days later, Mr. Levy received a phone call from Mr. Halperin. “We’re not going to follow through with the rental of that family for the last week in August,” he said.
“What do you mean?” asked Mr. Levy.
“The family notified me that something came up; they weren’t sure they’d be able to come,” said Mr. Levy. “Anyway, I heard of someone who’s willing to pay the full price.”
“If you’re both OK about the cancellation, that’s fine,” said Mr. Levy. “But what about my brokerage fee?”
“I assume that since the rental didn’t actualize, there’s no brokerage fee!” replied Mr. Levy.
“Why not?” replied Mr. Levy. “I did my job. I found a tenant and brokered the agreement. The fact that you decided not to actualize the rental is not my problem.”
“If I don’t get any rent, how can you expect me to pay a brokerage fee?” asked Mr. Halperin.
“I get paid for doing the job, not for your profit,” said Mr. Levy.
“If the rental didn’t actualize,” said Mr. Halperin, “that’s not called doing the job!”
The two came before Rabbi Dayan. “I brokered a rental which the sides mutually cancelled,” said Mr. Levy. “Am I entitled to the brokerage fee?”
“A broker is entitled to his fee when he completes the task expected of him,” replied Rabbi Dayan. “Usually this means that the agreement has reached a point of legal commitment.”
“What is considered legal commitment?” asked Mr. Levy.
“Regardng a shadchan, a matchmaker,” replied Rabbi Dayan, “the Rama [C.M. 185:10] rules that if the shadchan demands the fee at the engagement, upon completing the shidduch, whereas the families want to wait until the wedding, it depends on the common practice. Where there is no clear practice, the families can withhold the fee until the wedding. If one side should then retract before the wedding, the shadchan is not entitled to his fee, unless he stipulated that his role is simply to broker an agreement between the families.”
“That’s regarding shidduchim,” said Mr. Halperin. “What about business deals like a rental?”
“Sha’ar Ephraim [#150] addresses a case similar to ours, in which someone brokered a sale, and after the sale was consummated the two sides mutually agreed to cancel it,” said Rabbi Dayan. “Sha’ar Ephraim ruled that the broker is still entitled to his fee, since he completed his job and nothing more is incumbent upon him. The decision of the two parties to cancel the sale is not reason to relieve them of their debt to the broker.”
“Is it enough that the sides verbally agreed on the rental?” asked Mr. Levy. “Or do they need to sign a lease, take occupancy, etc.?”
“The clear implication of Sha’ar Ephraim is that the broker is entitled to his fee only because the sale was legally binding,” replied Rabbi Dayan. “However, if he brokered a price agreement, but the sale was never consummated in a legally binding manner, he is not entitled to the fee. Chikrei Lev [C.M. #136] suggests, though, with hesitation, that although the broker cannot demand his fee, he would not have to refund the fee if he was already paid.” (Pischei Choshen, Sechirus 14:10-11[16])