In the booming Philippine real estate industry, the relationship between developers or property owners and real estate brokers/salespersons is often governed by a commission-based structure. However, disputes frequently arise when an agent successfully facilitates a sale but the principal refuses or fails to pay the agreed-upon compensation.

Navigating the legal landscape to recover these unpaid commissions requires an understanding of the Real Estate Service Act (RESA), the Civil Code, and relevant jurisprudence from the Supreme Court.

I. The Legal Basis for Commission Claims

For a real estate broker or salesperson to legally demand a commission, certain prerequisites must be met under Republic Act No. 9646 (RESA Law) and contract law:

Valid Licensing: Under RESA, only licensed real estate brokers (and accredited salespersons under them) are authorized to practice and claim professional fees. An unlicensed individual generally cannot sue to recover commissions, as the act constitutes an illegal practice of the profession.
The "Procuring Cause" Doctrine: This is the most critical element in Philippine jurisprudence. A broker is entitled to a commission if they were the "procuring cause" of the sale—meaning their efforts set in motion a chain of events that, without a break in continuity, resulted in the sale.
Broker’s Authority/Contract: While an oral agreement is technically binding under the Civil Code, a written Authority to Sell or Marketing Agreement is vital. It should specify the commission rate, the duration of the authority, and the terms of payment.

II. Common Causes of Commission Disputes

The "Direct" Sale: The owner bypasses the broker and deals directly with the client introduced by the broker to avoid paying the fee.
Expired Authority: The sale is finalized shortly after the broker's written authority expires, even if the broker found the buyer during the subsistence of the contract.
Split Commissions: Disputes between co-brokers or between a developer and its in-house sales team regarding the division of fees.

III. Legal Remedies and Actions

When a principal refuses to pay, a broker has several avenues for recourse depending on the nature of the relationship and the amount involved.

1. Formal Demand Letter

Before filing a case, the claimant must send a Formal Letter of Demand. This serves as a "prior demand" required by law to put the debtor in default (Article 1169, Civil Code). If the principal fails to pay after the grace period stated in the letter, interest may begin to accrue.

2. Civil Action for Sum of Money

If the demand is ignored, the primary remedy is filing a civil suit for "Collection of Sum of Money and Damages."

Small Claims Court: If the unpaid commission does not exceed P1,000,000.00 (exclusive of interest and costs), the case is filed under Small Claims. This is a fast-tracked process where lawyers are not allowed to represent parties during the hearing.
Municipal or Regional Trial Courts: If the claim exceeds the small claims limit, it follows the regular Rules of Civil Procedure.

3. Breach of Contract

If the refusal to pay is accompanied by a violation of specific terms in the Authority to Sell, an action for Specific Performance or Rescission with Damages may be filed under Article 1191 of the Civil Code.

4. Filing an Adverse Claim or Notice of Lis Pendens (In Specific Cases)

While a commission claim is a personal action (money debt) rather than a real action (property title), if the commission was specifically tied to a lien on the property or if there is a pending case involving the sale's validity, a lawyer might advise on protective measures to ensure the judgment can be satisfied.

5. Administrative Complaint (DHSUD or PRC)

DHSUD: If the dispute is against a Real Estate Developer, the Department of Human Settlements and Urban Development (DHSUD) has jurisdiction over claims for commissions by brokers/salespersons against developers.
PRC: If the dispute is between two brokers, an administrative complaint for unethical conduct can be filed with the Professional Regulatory Board of Real Estate Service (PRBRES) under the PRC.

IV. Key Supreme Court Rulings to Remember

The Philippine Supreme Court has often protected brokers through the principle of equity. Even if the broker’s authority has expired, the Court has ruled in cases like Prats v. Court of Appeals and Manotok Brothers, Inc. v. Court of Appeals that if the broker was the "efficient procuring cause," they are entitled to compensation. The Court prevents "unjust enrichment" on the part of the owner.

V. Recommended Steps for Recovery

Audit the Evidence: Gather the signed Authority to Sell, Viber/WhatsApp logs, emails showing the client was introduced by you, and the Buyer’s Registration Form.
Send the Final Demand: Ensure it is sent via registered mail or personal service with a receiving copy.
Mediation: Most courts and the DHSUD require mandatory mediation. This is often the best time to settle for a compromise to avoid years of litigation.
Litigation: If mediation fails, proceed with the filing of the formal complaint.