“The term of this Agreement begins at the time the Developer becomes the owner. and for a period of one hundred and twenty (120) months from the date of the first transfer of a single entity or the lease signed to a party independent of the developer. Reserve Realty`s story may not be complete, as the broker/plaintiff last week asked the Connecticut Supreme Court for permission to appeal the Appeals Court`s decision. Right now, however, the takeaway for Connecticut brokers is that if you want your exclusive listing agreement to be enforceable, you need to make sure that the term or duration is not unlimited and that it is safe and detectable at the time of entering into the listing agreement. And if you need to have a duration or duration associated with future events that have not yet occurred, you must provide a reasonable fixed external date on which the registration contract ends or at the time such events are to occur. The Long Form Standards (and subsection (d) of Section 20-328-6a of the Connecticut State Agencies Regulations, which govern commercial registration agreements) and commercial short form standards require that all commercial registration agreements indicate the “approval period.” The Reserve Realty case further indicates that a potentially indefinite duration is not an acceptable duration. Instead, the duration of registration must be measurable and definitive to meet the long form and short form standards. Although the wording of the statutes and orders does not explicitly prohibit indefinite durations, the court considered the common and legal use of the word “duration” and concluded that the word “refers to a period of time that can be measured”. The court also held that, since an exclusive registration contract is a limitation on an owner`s ability to freely dispose of his or her property (i.e., the owner`s ability to freely sell or lease his or her property), it is essential that it contain a certain duration. While it is possible that the outcome in Reserve Realty would have been different if the listing agreement at issue had not been an exclusive listing agreement, we do not consider it desirable for brokers to rely on this distinction. In the Connecticut Court of Appeals decision dated June 22, 2021, Reserve Realty, LLC v. Windemere Reserve, LLC, 205 Conn. 299 (2021), the court found that an exclusive right of sale/lease registration agreement of the broker under section 20-325a of the Connecticut General Statutes was unenforceable because the duration of the broker`s exclusive right to sell and lease under the registration agreement (or the “authorization term”) was not determinable (and possibly indefinite) at the time of performance of the registration agreement.

The duration or duration of the unenforceable listing agreement in Reserve Realty “could only be calculated by reference to an uncertain future event” (the sale or lease to a third party) and did not provide for a “cap on the final term of the listing agreement”. Specifically, the impugned provision was essentially as follows: in Reserve Realty, the “first transfer” or “executed lease” from which the 10-year period was to begin were events that were neither (1) certain that they would occur within a known or specific time frame. In order for a broker to enforce the terms of a business listing agreement in Connecticut, the listing agreement must meet certain specific legal and regulatory requirements. In particular, it must meet either the “long-form standards” set out in paragraph 20-325(a) of the CGS or, for commercial transactions, the “abbreviated trade standards” set out in paragraph 20-325(a) of the CGS. In the absence of full compliance with the long-form standards or the abbreviated commercial standards, a broker may attempt to attach his or her hat to a savings clause in paragraph 20-325(a)(d) of the CGS by proving that (1) it would be unfair to refuse to collect a commission and (2) that the registration agreement essentially complies with certain elements of the long-form standards or the short-form commercial standards. Connecticut`s listing agreements must comply with CGS 20-325a (and applicable regulations) to be enforceable. This article is intended for the general interest and education only and does not constitute legal advice. The reader is encouraged to consult legal counsel before using the suggestions contained in this article. .