Real estate broker and real estate brokerage company not found liable for assisting a tenant to purchase a home, resulting in the tenant breaching lease

Writen by Victoria Munson |

Published: September 3, 2024

Case Study: Palmquist vs Livingston

2024 IL App (2d) 230219

The Second District recently addressed the question of whether a real estate broker and real estate brokerage company could be held liable for their role in assisting a tenant to purchase a home, which resulted in the tenant breaching her rental lease. The landlord sued the defendant (his former tenant) for unpaid rent, attorney fees and costs for breach of lease. The plaintiff also sued his tenant’s real estate broker and their brokerage company alleging they interfered with the plaintiff’s business relationship with the tenant because they helped the tenant buy a home. The Court did not agree with the landlord’s allegation of tortious interference of a contract by the real estate broker. They did not see any evidence that the brokers representing the tenant intentionally and unjustifiably induced said tenant to breach her lease. The record showed that she was determined to buy a home, she found the broker herself from an internet search and if they hadn’t helped her, she would have found another broker to do so. The Court held that establishing inducement by the brokers requires some “active persuasion, encouragement, or inciting that goes beyond merely providing information in a passive way.”

Takeaways:

An interesting analysis by the Court on the adequacy of the landlord’s mitigation of his damages and a review of the applicants that the landlord denied.

The Court also upheld the terms of the lease that capped the attorney fees, costs and expenses awarded to the prevailing party at $2,500.

About the writer: Prior to joining Illinois REALTORS® in 2022, Victoria (Vicki) Munson was an attorney in private practice focusing on real estate and estate planning matters. She enjoyed assisting buyers and sellers in bringing their transactions to the closing table. Victoria earned her bachelor’s degree from Western Illinois University and her Juris Doctor from The John Marshall Law School.

Your Illinois REALTORS® Legal Team