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

moneybunny123

sonastin wrote: »

Two weeks notice issued on 5th December would expire on 19th December. So the contract terminates on 19th December and the latest interpretation of 6 months after that would be 19th June.

Good, that's also my interpretation. So yes, I'm certain on the dates. Completion definitely took place after 6 months.

moneybunny123

FireWyrm wrote: »

Factually correct, but as per Foxton V Bicknell, the EA is only entitled to their fee if their introduction results in a direct sale. The fact that the OP met the eventual buyer in the street more than 6 months later and then happened to decide to sell to that person demonstrates a clear break between introduction and sale. The EA is screwed on both fronts. They cannot claim that they 'introduced' and therefore you should pay since Foxtons and they cannot claim anything under the 6 month clause either. Tell the EA to stick it.

Not true in my case, unfortunately. Mine and the buyers paths crossed about 5 months after they were introduced and about 3 months after contracts were terminated. But exchange took place after the crucial 6 months.

Do you think this makes any differnce?

GDB2222

There's no doubt that, if the EAs do sue you, they'll sue for the full amount of what they reckon is due to them. If you then hire a solicitor to defend the case, it'll cost you £££s, which you won't get back if the claim is under £5,000.

I would do the following:
1. Follow up on the complaints procedure rote, if necessary going to the ombudsman, to try and get the bill reduced to nothing.
2. Be prepared if necessary to pay up to say 25% of the fee to settle this and make it go away. It seems to me that there is some merit in the case from the EA's point of view (not a lot but some) and any lawyer will urge you to reach a compromise rather than incurring significant legal costs. Besides, the time and worry involved in a legal case is considerable, and it's worth paying a bit to avoid that.

On the merits of the case:
Well, you sold for the price originally offered through the EA, so the Judge will have some sympathy with the EAs. This is a client they introduced, and at a price they negotiated. For all the judge knows, your story about meeting in the street months later may be just a load of bull.
Your contract with the EA says " if at any time unconditional contracts for the sale of the property are exchanged" the fee is payable.
OTOH it also has the 6 months clause in it.
That's contradictory, but you can't say for sure how a judge is going to find on the day. Everybody above has been terribly gung ho, and I thought I should point out the pitfalls.

I'd make your chance of winning in court a lot more than 50%, but a fair bit short of 100%. Hence, my advice to bamboozle the EAs into submission if you can, but be prepared to pay a bit to settle the case.

moneybunny123

Thanks GBD, I do appreciate your thoughts. As you have read I asked the EA what the fee was for in relation to the contract and they pointed to that "introduced at any time..." bit (bad quote) BUT the next para contradicts it with the "6 month.." bit. Now they did not talk us through that and explain the meaning(s) to us. I have already talked to Ombudsman and they have said ask once more for Complaints Procedure (so far once written and once verbal) and take it up through them, AND as I really do not understand the EAs point, and they mine, this must be the best choice for both parties? Free and nuetral. However I will offer them a 3rd of the fee as a gesture to complete it all. How is that?

GDB2222

Offering one-third now seems too high to me. I'd ask for complaints procedure (which they perhaps don't even have) and at the same time offer 10% to settle it. If they accept that, great. Otherwise, wait until they come back with the complaints procedure, and indeed COMPLAIN! Your strong point is the 6 months clause. When they reply to your complaint saying their fee is due in full, as of course they will, threaten to tie them up with the ombudsman, and then raise your offer to 15%.

Edit: I am currently looking at some calculations of the Financial Services Ombudsman (different from the estate agents ombudsman). Despite there being an absolutely cut and dried case against the IFA, their complaints procedure rejected the complaint. The FOS found in favour of the complainant, as in my view they were bound to do, and in my view the IFA must have expected. So, this is a bit of a game, and my advice is to keep negotiating hard, but don't offer too much initially.

This depends a bit on your personality, how much is involved, and your attitude to risk. My gut feeling is that somewhere between 10% and 25% is a fair settlement figure to get rid of this. More, if you have a guilty conscience and in fact conspired with your buyer to wait the 6 months.

Yes, I know, that's not the case!

moneybunny123

GDB2222 wrote: »

Offering one-third now seems too high to me. I'd ask for complaints procedure (which they perhaps don't even have) and at the same time offer 10% to settle it. If they accept that, great. Otherwise, wait until they come back with the complaints procedure, and indeed COMPLAIN! Your strong point is the 6 months clause. When they reply to your complaint saying their fee is due in full, as of course they will, threaten to tie them up with the ombudsman, and then raise your offer to 15%.

Edit: I am currently looking at some calculations of the Financial Services Ombudsman (different from the estate agents ombudsman). Despite there being an absolutely cut and dried case against the IFA, their complaints procedure rejected the complaint. The FOS found in favour of the complainant, as in my view they were bound to do, and in my view the IFA must have expected. So, this is a bit of a game, and my advice is to keep negotiating hard, but don't offer too much initially.

This depends a bit on your personality, how much is involved, and your attitude to risk. My gut feeling is that somewhere between 10% and 25% is a fair settlement figure to get rid of this. More, if you have a guilty conscience and in fact conspired with your buyer to wait the 6 months.

Yes, I know, that's not the case!

Remember, they've already reduced the fee to 50% without me even asking. To come back and ask for the FULL fee at a later date would surely not happen given that we've had an invoice stating the amount they want?! Or do you think otherwise?

GDB2222

I think they'll threaten you with the full fee, for sure.

moneybunny123

Ok...but the invoice had no stipulations placed on it ie time limit, not accepted etc. So it is the amount they feel they are owed surely? To change that would mean a court case and in court they'd be onto a loser with that sort of messing around?

cheekychappy

tell the EA to whistle. Or maybe threaten to sue for harassment.

GDB2222

No, their 50% offer is just that. It doesn't mean that they have ratcheted down their claim by 50%. Have they put 'without prejudice' on any of the correspondence? Still 50% means they want to settle this, so go in lowish.