Can any legal experts offer me any advice re EA contract....?

moneybunny123

Hi there. We recently completed the sale on our home. A very long story but basically, almost a year ago we had our home on the market through an EA. They sent round a few people, one of whom made a (low) offer. It was rejected. A couple of months later, we terminated the contract with the agent giving the contracted two weeks notice.

A few months later again, our paths crossed with the person that made the offer. Conversations were had, and he made the offer again and we accepted. (The offer was verbally accepted about four months after we terminated the contract with the EA). No agents were used and we dealt with the buyer directly throughout the whole process. CONTRACTS WERE EXCHANGED MORE THAN SIX MONTHS AFTER THE CONTRACT WAS TERMINATED WITH THE AGENT - including the two week notice period. This, I think, is very important.

Fast forward to now and the EA has found out about this and is pursuing a fee. First of all, the EA demanded the full fee. However, after a lengthy telephone call to dispute it, they then dropped the fee to only half. Alarm bells?!! Surely if they're certain that the fee is LEGALLY and rightfully theirs, why would they give up trying to pursue the FULL fee and settle for only half?!

Anyway, these are the terms of their contract:

Section 3 – Sole Agency Fees

The Seller agrees to pay fees of 1.25%* of the sale price plus any agreed additional promotional costs plus VAT.

The Seller will be liable to pay fees to the agent, in addition to any other costs and charges agreed, if at any time unconditional contracts for the sale of the property are exchanged:-

· With a purchaser introduced by the agent during the period of the agents sole agency, or with whom the agent had negotiations about the property during that period or
· With a purchaser introduced by another agent during that period.

It is agreed that no party is currently negotiating to purchase the property and that no introduction has already been made by any other party.

In the event of a sale taking place within 6 months of the termination of the agency to a party introduced during the period of the agency the full fee is payable.

The obligation to pay fees arises on exchange of contracts for the sale of the property and the fees must be paid whether or not the sale completes.

We have spoken to the Ombudsman about this and they say that we have a case and that it SEEMS like we shouldn't have to pay a penny. However, before we go refusing to pay them altogether and risk being taken to court, I thought I'd ask for some advice on here.

Thanks in advance.

WebGuru

My understanding of your case is:

You sold your property to a buyer introduced via an Estate Agent, more than 6 months after the introduction took place?

If so, I can't see how they have any claim to commission, as the exchange of contracts took place after the 6 month period.

Otherwise you could sell it to them 5 years later and the EA would make a claim for commission.

Estate agents try it on all the time as they think consumers are weak. Also they don't have much on so they will try and persue cases like yours.

Have a google and read of the Foxton's verse Bicknell case study. Very very interesting and quote this when you next speak to them.

Then tell them to get stuffed and get advice from a solicitor.:beer:

Good luck, please keep us updated and don't pay a penny.

sonastin

What webguru said.

Just wanted to add a second confirmation that you should be OK.

DVardysShadow

I agree with the others. I suggest you write back and acknowledge that they have dropped the request to 50% - and ask them on what basis they make their claim. Keep copies. This could all be useful stuff if they decide to try and frighten you with court papers.

moneybunny123

DVardysShadow wrote: »

I agree with the others. I suggest you write back and acknowledge that they have dropped the request to 50% - and ask them on what basis they make their claim. Keep copies. This could all be useful stuff if they decide to try and frighten you with court papers.

Hi DVardysShadow - thanks for your reply. We actually did this yesterday. We wrote to him asking exactly what the invoice was for. The senior partner of the company replied asking us to telephone him (handy that, so nothing is in writing!). We didn't, but again wrote to him asking to reply. His reply was:

1. The buyer was introduced during the period of our agency. (which we've never denied and IS true)
2. A sale was agreed and placed into the hands of solicitors within 6 months of the termination of the agency. (not sure the contract mentions anything to do with solicitors becoming involved during the 6 month cooling off period?!)

What do you make of that?!!

FireWyrm

moneybunny123 wrote: »

Section 3 – Sole Agency Fees

The Seller agrees to pay fees of 1.25%* of the sale price plus any agreed additional promotional costs plus VAT.

The Seller will be liable to pay fees to the agent, in addition to any other costs and charges agreed, if at any time unconditional contracts for the sale of the property are exchanged:-

·With a purchaser introduced by the agent during the period of the agents sole agency, or with whom the agent had negotiations about the property during that period or
·With a purchaser introduced by another agent during that period.

It is agreed that no party is currently negotiating to purchase the property and that no introduction has already been made by any other party.

In the event of a sale taking place within 6 months of the termination of the agency to a party introduced during the period of the agency the full fee is payable.

The contract says EXCHANGED contracts and WITHIN 6 months. You didnt exchange contracts until AFTER 6 months, so tell them to stick it. You could have instructed your solicitor a full year before exchange actually happens, but nothing is final until EXCHANGE, therefore, they havnt a leg to stand on. I'd write back telling them that....assuming your facts are correct as you have detailed them to us.

Since they are so fond of contracts...use it. Their contract is quite specific. It says nothing about instructing solicitors.

moneybunny123

Thanks Firewyrm - this is my view too. However, I worry that their contract somehow has a loophole, and that they can perhaps catch us out on this paragraph:

"The Seller will be liable to pay fees to the agent, in addition to any other costs and charges agreed, if at any time unconditional contracts for the sale of the property are exchanged: With a purchaser introduced by the agent during the period of the agents sole agency, or with whom the agent had negotiations about the property during that period"

The black and white contract somehow seems so grey!

FireWyrm

moneybunny123 wrote: »

"The Seller will be liable to pay fees to the agent, in addition to any other costs and charges agreed, if at any time unconditional contracts for the sale of the property are exchanged (within 6 months): With a purchaser introduced by the agent during the period of the agents sole agency, or with whom the agent had negotiations about the property during that period"

The black and white contract somehow seems so grey!

There, fixed it for you.

No, the portion of the contract you quoted above clearly states WITHIN 6 MONTHS, not forever....otherwise, they could demand fees if you sold 10 years down the line. Yes, they introduced the buyer within the period of sole agency, but you didnt exchange contracts until long after you had severed the contract, you even gave them notice. The actual legally binding stuff happened long after their involvement had ended. Tell them to shove it.

moneybunny123

OK. Next question. What will happen if I don't pay? Will they try and pursue the full fee via the courts? And in reality, what does that mean? Will it get that far or will the Ombudsman decide?

moneybunny123

Interestingly, I should add that when we spoke to the Ombudsman, they told us to ask for a copy of the EA's complaints procedure but even said they'd be surprised if they gave it to us immediately.

So, we asked, and surprise surprise this was when they replied offering to reduce the fee by half but not giving a copy of the complaints procedure. In the letter it said if we still wanted the complaints procedure, we could have it, but the offer of only half the fee would be withdrawn.

sonastin

They know they don't have a leg to stand on which is why the EA is being so cagey. I would write back saying that whilst you don't dispute his points other than perhaps the meaning of "sale agreed", the contract makes no mention of fees being due on instruction of solicitors so once more, could he please justify this invoice. Remember negotiations can take place right up to exchange so nothing has been firmly ageed until that point.