OPINION OF THE COURT
Wе are asked to determine on this appeal whether a person who negotiates a reduced payoff figure for an existing mortgage must be a licensed real estate broker in order to recover a fee for his services. For the reasons which follоw, we find that the plaintiff Edward J. Kreuter was not required to have a license in order to negotiate with the mortgagee on behalf of the defendant Theodore Tsucalas, and that Kreuter is thus entitled to recover the commission to which the parties agreed.
Kreuter is аn officer and employee of the plaintiff Equitable Mortgage Corporation (hereinafter Equitable), which is a registered mortgage broker. The defendant Theodore Tsucalas is the owner of two adjoining parcels of property located on West 26th Strеet in Manhattan. Tsucalas is also the principal of the corporate defendant, Tommy’s West 231st Realties, Inc. (hereinafter Tommy’s West), which owns premises located at West 231st Street in the Bronx.
In the spring of 1996, Tsucalas allegedly approached Kreuter to requеst his assistance in negotiating a reduced payoff figure for an existing mortgage on the West 26th Street properties.
In order to raise the funds needed to satisfy the existing mortgage, Kreuter suggested that Tsuсalas retain Equitable to secure a mortgage on the Bronx property owned by Tommy’s West. In furtherance of this plan, the parties signed another agreement requiring Tommy’s West to pay Equitable a fee of three points of the amount of the mortgage loan, which wоuld be due when a commitment was obtained. About three months later, on August 6, 1996, Equitable obtained a $240,000 mortgage commitment for Tommy’s West from Greenpoint Bank. It is undisputed that the three-point fee due to Equitable pursuant to the parties’ agreement was $7,200, and that $2,200 of this sum was paid, leаving a balance of $5,000 still outstanding.
Kreuter further claims that after the mortgage commitment on the Bronx property had been obtained, Tsucalas agreed to modify their fee agreement regarding the West 26th Street properties to provide him with a commission equaling 40% of the total amount of any savings he achieved through the negotiation of a reduced payoff figure. On August 28, 1996, Kreuter sent Tsucalas a letter to “confirm the changes to our original agreement,” which stated that “[i]n order to provide Edward J. Kreuter an incentive to negotiаte a larger mortgage reduction then $25,000 for a fee of $10,000 * * * Theodore Tsucalas has agreed to pay Edward J. Kreuter a fee of 40% of the entire savings.” However, Tsucalas denies that he ever received this letter.
Shortly thereafter, Kreuter began negotiations to obtain a lower payoff figure for the West 26th Street properties with Glaves & Associates, Inc. (hereinafter Glaves), which was representing RTC as a servicing agent for mortgage loans. To this end, Kreuter made a written offer to satisfy the mortgage on the West 26th Street рroperties for $225,000. Kreuter then
Although Tsucalas subsequently satisfied the outstanding mortgage on the West 26th Street properties for the reduced sum of $250,000, he refused to pay Kreuter a $71,198 commission in accordance with the December 17, 1997 agreement. The plaintiffs then commenced this action to recover both the fee due pursuant to the December 17th agreement, and the $5,000 fee due to Equitable under the terms of the separate agreement to procure a mortgage on the Bronx property owned by Tommy’s West. At the conclusion of a nonjury trial, the Supreme Court found that the December 17th agreement was unenforceable, and that Kreuter was owed only the unpaid $7,500 balance of the flat $10,000 fee the parties оriginally agreed he would receive for his services in negotiating a reduced payoff figure for the mortgage on the West 26th Street properties. In reaching this determination, the Supreme Court noted that Kreuter and the mortgagee came to an agreement оn the payoff figure prior to the execution of the December 17th agreement. The Supreme Court additionally awarded the plaintiffs the $5,000 fee owed pursuant to the separate agreement between Equitable and Tommy’s West.
On appeal, the plaintiffs contend that the Supreme Court erred in finding that the December 17, 1997 agreement was unenforceable, and that they are entitled to the $71,198 commission due under its terms. The defendants counter that the December 17th agreement was invalid because it was not supported by new consideration. The defendants further maintain that even if the December 17th agreement is found to be enforceable, the plaintiffs are barred from recovery because neither Kreuter nor Equitable are licensed real estate brokers. No
Turning first to the issue of whether the December 17, 1997 agreement constituted a valid contract, we reject the Supreme Court’s apparent conclusion that the contract was unenforceable because it was based upon past consideration. Although it is undisputed that Kreuter negotiated the reduced mortgage payoff figure before the execution of the December 17th agreement, General Obligations Law § 5-1105 provides that “[a] promise in writing and signed by the promisor * * * shall not be denied effect as a valid contractual obligation on the ground that [the] consideration for the promise is past or executed, if the consideration is expressed in the writing and is proved to hаve been given or performed.” In order to be enforceable pursuant to General Obligations Law § 5-1105, the writing must contain an unequivocal promise to pay a sum certain, at a date certain, and must express consideration for the promise (see, Umscheid v Simnacher,
Furthermore, we reject the defendants’ contention that Kreuter is barred from recovering a fee for the services he performed in connection with this agreement because neither he nor Equitable are licensed rеal estate brokers. Real Property Law § 440 defines the term “real estate broker” to include any person or entity who, for a fee or commission, lists for sale or attempts to negotiate a sale of an interest in real estate, or “negotiates or offers or attempts to negotiate, a loan secured or to be secured by a mortgage.” Furthermore, Real Property Law § 442-d requires any individual or entity seeking compensation for services rendered in connection with the sale or leasing of real estate, оr “negotiating a loan upon any real estate,” to plead and prove that such person or entity was a duly-licensed real estate broker or salesman on the date when the alleged cause of action arose. The licensing requirement serves tо protect the public from inept, inexperienced, or dishonest persons who might perpetrate or aid in the perpetration of
Although Real Property Law § 442-d clearly bars an unlicensed person from recovering commissions if that person has performed services faсilitating the sale or leasing of real property (see, Berg v Wilpon,
Real Property Law article 12-A was also found not to bar the plaintiffs recovery of a fеe by this Court in Eaton Assocs. v Highland Broadcasting Corp. (supra). In that case, the plaintiff Eaton was hired to prepare, present, and market a refinancing package for the defendant Highland, which owned and operated two radio stations. Eaton prepared a business plan which detailed market sharе, sales, cash flow, and expenses for Highland to present to potential lenders. As a result of Eaton’s activities, Highland obtained first and second mortgage financing from lending institutions. When Eaton brought suit to recover a fee for its services, Highland argued that it was barred from reсeiving a commission because it did not have a real estate license. This Court rejected Highland’s argument, reasoning that Eaton’s services, including the preparation of a financial plan and the rendering of financial advice to Highland’s employees and оfficers, fell outside of the scope of brokerage services, and that the purposes of the real estate broker’s licensing requirements would not be furthered by requiring compliance from a financial consultant such as Eaton.
Accordingly, the December 17, 1997 agreement in which Tsucalas agreed to pay Kreuter a fee in the sum of $71,198 upon satisfaction of the mortgage is enforceable. Although Kreuter contends on appeal that he is entitled to the entire $71,198, it is undisputed that Tsucalas paid a $2,500 retainer. Therefore, we modify the judgment to award Kreuter $68,698 ($71,198 minus $2,500), and to award Equitable $5,000 which Tommy’s West owes it pursuant to their separate mortgage placement agreement.
Ritter, J. P., Luciano and H. Miller, JJ., concur.
Ordered that the judgment is modified, by deleting the provision thereof awarding the plaintiffs damages in the principal sum of $12,500, and substituting therefor provisions awarding the plaintiff Edward J. Kreuter damages in the principal sum of $68,698, and the plaintiff Equitable Mortgage Corporation damages in the principal sum of $5,000; as so modified, the judgment is affirmed, with costs payable to the plaintiffs.