Another blow for (some) Estate Agents

Estate Agents trying to wring extra commissions out of sales made after they had lost the instruction have been dealt a severe blow by a new legal ruling. Other threads have commented that large countrywide agencies(!) have a whole department looking at whether properties they have lost have subsequently been sold so they can make a claim for the commission.

During a major legal tussle between two heavyweight Estate Agents about who should get the commission on a £1.4 million house (Not worth the effort really - only about £31,500+VAT.) the judge in a Court of Appeal decided that a critical point was the definition of a ‘purchaser’.

To cut a long story short, the house had been up with Agent A who had introduced viewers but failed to sell it. The sellers then approached Agent B and changed the first agent agreement from sole agency to multiple agency.

Whilst Agent A were the sole agents they had introduced a couple to the seller but the couple had not decided to buy. When Agent B later showed the same couple around they did decide to purchase the house. Agent A then demanded their commission from the seller using the now common argument “we introduced couple X and our contract states that they’d be liable if they sold the house to “a purchaser introduced by them”.

Agent A went to court, and won but a crucial Court of Appeal has overturned the decision and the commission returns to Agent B. The Appeal Judge based his decision on the definition of “purchaser”. He decided a potential “purchaser” only becomes a “purchaser” when they decide to purchase. Agent A introduced the couple but they weren’t “purchasers” because they only became “purchasers” when dealing with Agent B.

You can find the story and a link to the court report at this site looking at the ruling from the viewpoint of Private Sales websites.