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The Appellate Division affirmed the lower court's decision, refusing to let LHWS add the new claim. The court found the claim was based on an oral agreement, which falls under New York's Statute of Frauds. This law requires certain real estate contracts, including broker commission agreements, to be in writing to be enforceable. The court also rejected the new evidence about a cash buyer, explaining that LHWS still needed to show it actually produced a buyer who was ready, willing, and able to purchase the property within one year, on the seller's terms. The court found LHWS never met that standard, so the new evidence didn't change the outcome.
LHWS LLC, a real estate broker, sued S.L. Green Realty Corp. over a commission dispute involving the property at 712 Madison Avenue. LHWS claimed it was owed a commission based on a 2018 oral agreement. That agreement was made when S.L. Green's vice president asked LHWS's principal to help find a buyer for a mezzanine loan on a related building. LHWS later tried to add a breach of contract claim to its lawsuit, pointing to new evidence that a buyer was ready to pay $50 million in cash back in 2019. The trial court denied LHWS's request to amend its complaint. LHWS appealed that decision.
The main question was whether LHWS could add a new breach of contract claim to its case. This depended on whether the oral agreement could legally support a broker's commission claim, and whether the new evidence about a cash buyer actually strengthened LHWS's position enough to matter.
This case highlights how New York's Statute of Frauds affects real estate broker commission claims. Oral promises alone often aren't enough to enforce a commission agreement. Brokers may need signed, written agreements to protect their right to payment, especially in high-value property or lease deals.
Talk to a licensed real estate lawyer in New York.