FACTS:                    

The seller and agent entered into an Arizona REALTORS® Residential Listing Contract Exclusive Right to Sell/Rent (“Listing Contract”).  The tail clause in lines 66-70 was for a period of 90 days after expiration of the Listing Contract.  During the term of the listing, the ultimate buyer viewed and made an offer to purchase.  The ultimate buyer’s offer was rejected at the time because there was a higher competing offer that was accepted instead.  The first contract cancelled and the listing expired a few weeks later.  Two weeks after the listing expired, the ultimate buyer closed escrow on the property.  No agent participated in the closing between the ultimate buyer and seller.  The agent discovered the closing and demanded her listing commission.  The seller refused to pay the commission.

ISSUE:                      

Is the agent entitled to a commission even though the transaction closed after the listing expired?

ANSWER:                

Yes. 

DISCUSSION:

The Listing Contract at lines 66 through 69 provides: “After the expiration of this Agreement, the same commissions, as appropriate, shall be payable if a sale or rental is made by Owner to any person to whom the Premises has been shown or with whom Owner or any broker has negotiated concerning the Premises during the term of this Agreement: (i) within (blank) days after the expiration of this Agreement, unless the Premises has been listed on an exclusive basis with another broker…”.

Generally, tail provisions like the one contained in the Arizona REALTORS® Listing Contract are enforceable as written.”  See Hyde Park-Lake Park, Inc. v. Tucson Realty & Trust Co., 18 Ariz. App. 140, 500 P.2d 1128 (App. 1972).  Based on the facts presented, the agent has contractually earned the agreed upon commission because the ultimate buyer and seller closed escrow shortly after the listing contract expired, well within the 90day tail period set forth in the Listing Contract.