If a broker makes a payment to the wrong party, can they refuse to pay correct party until they recover the money wrongly paid?

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If a broker makes a payment to the wrong party, can they refuse to pay correct party until they recover the money wrongly paid?

Our agents office paid money written up on HUD to be POC to us (the seller). Her office sent the money to the wrong party (another realty corporate office) and now they are refusing to pay us until they get the money back that they paid in error. I would like to know where to find legal information or similar cases to recover this money from either the broker or through small claims court as the money owed is $1,400 without having to wait for them to recover the money they paid to the wrong party.

Asked on October 29, 2010 under Real Estate Law, Minnesota

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Specific case law is best sought from an attorney in your area.  Generally speaking, if you have a contract with your agent and they failed to perform under the contract (and sending money to the wrong party is failing to perform under your contract) then you can sue them as soon as you like for the money. No contract law would permit a party to have to wait for what is due and owing becaue the other party "made a mistake" in holding up their end of the bargain. It is unbelievable that they would ask you to do so in this case as well.  Take your action to small claims court whenever you would like.  Good luck. 


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