Estate agent's commission

Marvel1

Moriath wrote: »

If its clear and in the contract unless you take them to court might have to suck it up

And seems it was, a tricky one.

GDB2222 wrote: »

They signed a contract with the agent which (apart from the fees for the letting) included a 1.75% + VAT commission if the house were sold to the tenant. At the time, nobody thought the house would be sold, and they did not query that contract term.

G_M

Are you prepared to fight this through the courts if the agent puts in his claim for commission? Given that the law is ambiguous.......

The suggestion for the tenant to move out, check out, and later buy, is risky. You've alredy alerted the agent to the facts that a) you wish to sell and b) the tenant wishes to buy.

Agents are not daft and value their commission. They only have to watch the Land Registry to see when you sell, and the name of the new owner.......

Negotiate. Tell the agent that if they don't agree to reduce their comission by (half?), you will not sell to the tenants. Instead you will put the property on the market, with another agent, and they will therefore get nothing.

eddddy

The clause about a Sales Commission almost certainly isn't enforceable.

If the Letting Agent won't back down, it could be settled by a redress scheme rather than a court. The Letting Agent must be a member of one of three redress schemes:

- The Property Ombudsman
- Ombudsman Services: Property
- The Property Redress Scheme

If it's The Property Ombudsman, they are clear that Sales Commission Terms are not allowed in standard Letting Agent Agreements.

Here's an extract from their Code of Conduct:

5j Your Terms of Business must:

• Not require payment of a commission in circumstances where the tenant agrees to purchase the property unless this is subject to a separate sales agreement

https://www.tpos.co.uk/images/documents/rules-codes-obligations/residential-letting-agents/Code_of_Practice_Residential_Letting_Agents_effective_1_October_2016.pdf

Further details here:
https://www.tpos.co.uk/images/documents/media-articles/property-drum-sept-12.pdf

So a complaint to the ombudsman should close the matter.

phill99

So if that clause wasn't in the contract, and you had decided to sell the house and instructed an EA (this one or another) with the same commission structure, and the tenant subsequently put in an offer, you would still be liable for the commission to the EA. So what's the issue?

kinger101

phill99 wrote: »

So if that clause wasn't in the contract, and you had decided to sell the house and instructed an EA (this one or another) with the same commission structure, and the tenant subsequently put in an offer, you would still be liable for the commission to the EA. So what's the issue?

If OP sold direct to the tenant, he wouldn't need to instruct an EA.

GDB2222

eddddy wrote: »

The clause about a Sales Commission almost certainly isn't enforceable.

If the Letting Agent won't back down, it could be settled by a redress scheme rather than a court. The Letting Agent must be a member of one of three redress schemes:

- The Property Ombudsman
- Ombudsman Services: Property
- The Property Redress Scheme

If it's The Property Ombudsman, they are clear that Sales Commission Terms are not allowed in standard Letting Agent Agreements.

Here's an extract from their Code of Conduct:



Further details here:
https://www.tpos.co.uk/images/documents/media-articles/property-drum-sept-12.pdf

So a complaint to the ombudsman should close the matter.

I would thank that post 10 times if I could. This agent is a member of TPOS, as it happens.

We certainly didn't fancy a trip to the courts.

G_M

GDB2222 wrote: »

I would thank that post 10 times if I could.

We'll see if we can bump up the thanks tally for edddy

GDB2222

phill99 wrote: »

So if that clause wasn't in the contract, and you had decided to sell the house and instructed an EA (this one or another) with the same commission structure, and the tenant subsequently put in an offer, you would still be liable for the commission to the EA. So what's the issue?

If I instruct an EA to sell a property, he has a load of work and expense. All done on the off-chance of a sale.

This EA has simply passed on an offer from the tenant.