Procuring Cause, What’s All The Fuss About?

Procuring Cause, What’s All The Fuss About?

By G-II Varrato II, ePRO 500, ABR, RECS, Mentor
Coldwell Banker Residential Brokerage

I recently had to help one of our Protégés navigate this very complex issue, the issue/concept of Procuring Cause.

Procuring Cause actions are, perhaps one of the most often registered complaints in real estate transactions, between Agents/Brokers. So what’s all the fuss about?

The Black Law Dictionary’s definition has been adopted by the National Association of Realtors® as the concept of Procuring Cause as it plays out in arbitration cases. The Black’s Law Dictionary definition has also been incorporated into the Realtors® Code of Ethics. You will find, in the NAR Arbitration Manual, reference to the Black’s Law Dictionary definition of Procuring Cause. The Black’s Law Dictionary definition is set in two sections or parts. The first part says of Procuring Cause: “A cause originating a series of events which without break in their continuity, results in accomplishment of a prime objective…”

In the world of real estate, at first blush, one might be predisposed to consider that this concept of, “…A cause originating a series of events which without break in their continuity, results in accomplishment of a prime objective …” shouldn’t be too difficult to establish. Not so, as you will see as we explore Procuring Cause.

The second part of the Black’s Law definition is where most of the confusion comes about. Black’s Law Dictionary goes on to say about Procuring Cause: "A Broker will be regarded as the ‘Procuring Cause’ of a sale, so as to be entitled to commission, if his efforts are the foundation on which the negotiations resulting in a sale are begun."

So how does this all play out in real life in the world of real estate? (NOTE for clarification; please understand that the terms Broker and Agent are interchangeable in this article.)

First, it’s important to understand that the NAR distills the concept of Procuring Cause to the following: ". . . for purposes of arbitration, Procuring Cause can be readily understood as the uninterrupted series of causal events which resulted in the successful transaction." In short, who or what, caused the transaction to conclude successfully? The questions that an arbitration panel would engage are which Realtor® was the most responsible for the Buyer’s decision to make an offer on the property. Therefore, that particular Realtor® would be the Realtor® with Procuring Cause.

Oooppss… not so fast. Before we get too far along, we must discuss the concept of Alienation. Alienation is interchangeable with two other words, Estrangement and Abandonment. All play a part in the concept of Procuring Cause.

The NAR Arbitration Manual states to conditions that would sustain Alienation. They are:

". . . [A] purchaser, despite reasonable efforts by the Broker to maintain ongoing contact, may seek assistance from another Broker. The panel will want to consider why the purchaser was estranged from the first Broker. .
. . [T]here may be no question that there was an ongoing relationship between the Broker and the purchaser; the issue then becomes whether the Broker engaged in conduct which caused the purchaser to terminate the relationship (estrangement)."

So, what types of events could cause Alienation? Perhaps the Agent conducted himself/herself in an inappropri...

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