Demand Letter
Protect your commission and address lease liability. California-compliant demand letter using CA Civil Code § 1624 and AB 5 standards for CRE brokers.
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In the fast-paced California commercial market, disputes over unpaid commissions or misinterpreted LOIs can jeopardize your firm's revenue. Whether dealing with a breach of a triple net lease or a... Read more
In the fast-paced California commercial market, disputes over unpaid commissions or misinterpreted LOIs can jeopardize your firm's revenue. Whether dealing with a breach of a triple net lease or a refusal to pay after a procurement trigger, a formal demand letter serves as the essential first step toward resolution. This document is engineered to leverage California Civil Code § 1624 (Statute of Frauds) to enforce written listing agreements and addresses the complexities of AB 5 worker classification, ensuring your claim is legally sound and professionally presented prior to potential litigation.
Beyond the standard demand letter sections, this template adds fields specific to Commercial Real Estate Broker:
The core legal purpose of a demand letter is to formally notify the recipient of a claim and demand specific action or compensation, providing an opportunity to resolve a dispute without litigation. It serves as an assertion of a legal right and provides legal protection by documenting the claim and creating a record of the attempt to resolve the matter amicably.
Misrepresentation claims
Detailed disclaimers in contracts stating that all representations are believed to be accurate but should be independently verified by clients.
Commission disputes
Clear agency agreements and commission schedules included in contracts outlining the fees and when they are earned.
For this demand letter to be legally valid:
Common mistakes to avoid:
Under California Civil Code § 1624, agreements to pay a commission for the sale or lease of real estate must be in writing to be enforceable. Our demand letter helps you cite your written agency agreement or listing contract to fulfill this 'Statute of Frauds' requirement, ensuring your claim for fees from a sale or lease transaction is legally recognized.
California law requires transparency in commercial dealings. If a landlord is withholding commission or a tenant is disputing CAM charges, your demand letter should specifically outline the factual background and the 'Specific Demand' clause. Citing clear trigger points in the lease regarding TI allowances or CAM reconciliations helps mitigate misrepresentation claims.
Yes. While Letters of Intent often contain non-binding clauses, many include binding 'exclusive dealing' or 'confidentiality' provisions. If a party bypasses you after you’ve served as the procuring cause, a demand letter provides the 'Legal Basis' for your fee by documenting your role and the breach of the implied covenant of good faith and fair dealing common in California commercial contracts.
To substantiate that the recipient received the demand—a critical step for potential litigation—you must use a method providing proof of delivery. We recommend sending the letter via certified mail with a return receipt requested, as this helps avoid common mistakes like failing to maintain a record of delivery.
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