Issue with Estate Agent - Double Commission

Harbottle

Hi

The issue is as follows:

I originally signed a sole agency agreement with a local estate agent (“Agency A”) to sell my flat.

Agency A managed to get a handful of viewings during the course of his sole agency including one applicant (the “Applicant”) who visited the property twice during the sole agency period.


During the entire process, Agency A did not obtain any offers for the property.


Due to the deterioration in the property market we elected to go multi agency. We thought this would give us more chance of a sale.

We ended our sole agency agreement with Agent A, giving the required notice period, and changed to a multi-agency agreement.

We retained the services of Agency A and hired another local firm, Agency B

About 8 weeks passed and Agent B persuaded the Applicant to view the property again. The Applicant put in a 4 offers through Agency B. We accepted the fourth offer.


The property sale eventually completed in early 2009.


Throughout the entire process Agent A was not involved.

On exchange of contracts, both Agent A and Agent B claimed entitlement to a fee in writing to my solicitor.


We asked the agents initially to resolve the situation between themselves and decided how the commission was split. Agent B refused to communicate with Agent A.


Agent A did not reply to the letter directly although Agent A did say he was prepared to accept 50% of his commission.

In the end we had to pay Agent B their full fee on the basis that the terms and conditions of their agreement stated that if payment was not made within 10 days of completion the commission payable would double.

Agent A has somehow now found out that Agent B has been paid and is demanding his commission. He is now demanding his entire commission on the basis that Agent B was paid their entire commission.

We are being threatened with County Court action if we do not pay the full fee.


The Applicant, who we communicated with frequently during the sale process has put in writing that the reason she did not make an offer with Agent A because they provided her with a poor customer service not returning her calls and being generally unhelpful. She decided to look at other properties and was not interested in pursuing the purchase further.

I understand there is a case that went to House of Lords (Foxtons V Pelkey Bicknell) who basically stated that estate agents hav to be the effective cause of a sale i.e. introduce a purchaser to the purchase. In this case th judgement went against Foxtons who (as in my example above) did not get any offers for the property they were marketing

What are your thoughts on how to resolve this situation?

maninthestreet

Agent A does not have a legal leg to stand on, due to the court case you quote - tell them to take a hike.

Harbottle

Thanks that is what we thought.

Have also found out that he is not registered to either Ombudsman scheme so will be contacting Trading Standards with a complaint.

Given the low cost of making a claim through the small claims process, what is the deterrent to him in making such a claim?

Presumably he thinks he stands a chance or we may pay him to get him of our backs (will not happen) but ultimately it seems that he is able to put us through this inconvenience with no comeback to him or damage to his reputation if he is unsuccessful. Very frustrating.

Home_Swap_Advice

Without knowing exactly what your contract says, I would not follow the advice given by anybody here. If you go to court and loose, you could end up paying the court fees and end up with a ccj.

It says in many agents contracts that if (at any time) a prospective purchaser which was introduced by them becomes an actual purchaser, they will receive the fee. If this is the case, Agent A does have a leg to stand on.

There is no guarantee in any of these cases, even though Foxtons lost theirs.

I would seek the advice of a profesisonal. It very much depends on the contracts

daisygrabber

Slightly different situation but maybe similar priciples.
We sold to a viewer who had been initially introduced through an agent. They made several offers which were accepted but sales fell through due to their own sale falling through.
Eventually we took their house as part exchange and dealt with them directly for the whole transaction, negotiated round our dining table, went directly to our own solicitors, etc.
We recognised that the agent was due something because of the original introduction so we paid them their % on the difference between what we received for our house and what we paid for the part ex house, ie paid their commission on cash we received.
They weren't happy but I guess a cheque in the hand is worth several court cases and they accepted it.
We had asked our solicitor's advice. He felt that if it went to court, it could go either way but the agent would probably win so by sending our cheque, we couldn't lose.
Maybe a token gesture is called for here in acknowledgement of the original introduction?

Off topic but don't you only get a CCJ if you don't pay immediately after the court tells you to?

Daisy x

chickmug

Home_Swap_Advice wrote: »

There is no guarantee in any of these cases, even though Foxtons lost theirs.

This is true in my experience as I know agents who have been awarded commission. So proceed with caution.

Debt_Free_Chick

chickmug wrote: »

This is true in my experience as I know agents who have been awarded commission. So proceed with caution.

Yup - the general principle is that each case depends on the specific facts/circumstances of the case. So you can only truly rely on a previous case if your circumstances are identical - and there are no other matters that might distinguish your situation from the case you're relying on.

RabbitMad

OP your specific circumstances mirror the foxton's case (even to the point that the eventual purchaser had decided not to purchase your property) and given you have the purchaser (in writing) saying that agent A didn't introduce them to buy the property I think that you are on very strong ground.

If I were you I'd write back (mark your letter without prejudice) saying that the eventual purchaser has provided you with written evidence that they were introduced by Agent B and point out the case you mention and tell them to take a hike (politely).

I wouldn't worry about court fees (Unless the commission is >£5k as it will be small claims track and the fees wouldn't amount to much more than you stand to lose.

Harbottle

Thanks for you thoughts on this everyone.

Have been looking at this case in a bit more detail. Is seems that the Foxtons case establishes a test to determine if an estate agent is the 'effective cause' of a sale. It seems that in order to earn a commmission an estate agent has to 'introduce the purchaser to the purchase'. Therefore it is not enough for an agent to introduce a 'purchaser to the property' which is all that Foxtons (and Agent A) actually did.

On the matter of the statement from the purchaser, please see a section of what I have in writing from the buyer below:

initially viewed the property through Agent A, although they did not attend the viewing with me. They did not follow up on the viewing nor contact me in any way for feedback. I was quite dissatisfied with this service.At this time I was not interested in making an offer for this property and continued to view other properties.
I viewed many properties through Agent B and found the person I dealt with there, to be quite helpful. I viewed your property with him and decided at that point I was interested in making an offer. I put this offer through Agent B because they followed up on it and were very helpful.

chickmug

I have had cases like this where we and the other agent have been members of the NAEA. The NAEA say that fellow members must do everything to ensure sellers do NOT incur two commissions and as such where there are overlaps the two members are encouraged to come to an agreement.

This I did several times on a split commission basis - half each which seemed very sensible but I wasn't as greedy as some the Ea's today.

So are both agents members?

Do let us know?

Harbottle

Agent A is not a member of the NAEA nor a member of an Ombudsman scheme.

Agent B is a member of the NAEA and OEA. When our solicitor asked Agent B to liaise with Agent A they point blank refused and said it was not their responsibility, not in their contract and that we needed to sort it out ourselves. On completion Agent B pointed to a clause in the contract which stated that if we didn't pay them within 10 days of completion then the commission payable to them would double. Agent B also put it in writing that we had agreed to pay Agent A separately which is a complete lie.

To cap all this we then had a board war (more a board skirmish) where Agent A removed Agent B's board and chucked it in a hedge and changed their own board to sold.

Any thoughts on how to play this would be appreciated...