2 year estate agent clause

jcampbell784

Hi Guys,

I've asked this question of our estate agent contact today and he wasn't currently able to help. Has anyone ever had the below clause in their estate agent contract and able to tell me what the 2 years clause part means... I can't seem to decipher it.

(Our 14 days termination clause ends on Wednesday and I'd like to make sure I understand this before then. You know how some estate agents try talk you around anything. Even a 2 year lock in clause.)

"In accordance with the Code of Practice (TPO), following termination of our agreement, if a purchaser introduced by us or with whom we have negotiated goes on to buy the property through another agency, we will still be entitled to our fee in a memorandum of sale is issued by the other agent within 6 (six) months of date of termination of our instruction (at the end of the 28 days (twenty eight) days notice) and where subsequent exchange of contracts takes place. In all other cases, we will still be entitled to our fee for up to 2 (two) calendar years from termination (at the end of the 28 (twenty eight) days notice) of our agreement. Please see the statutory information later in this agreement for your cancellation rights."

Thank you!
JC

davidmcn

I can't make much sense out of that. Does "all other cases" mean those where the buyer wasn't introduced by them?

eddddy

jcampbell784 wrote: »

Has anyone ever had the below clause in their estate agent contract and able to tell me what the 2 years clause part means... I can't seem to decipher it.

It's a standard clause that will appear in most EA contracts - as specified by the The Property Ombudsman.

It means...

• If the EA introduced a person (e.g. Sent them to your house for a viewing), and that same person eventually buys your house from you privately within the next 2 years - you have to pay the EA their fee.

Or...

• If somebody negotiated with the EA about your property (e.g. made an offer on your property via the EA, and you rejected it), and that same person eventually buys your house from you privately within the next 2 years - you have to pay the EA their fee.

Here's the relevant extract from The Property Ombudsman's Code of Practice.

Fee Entitlement and Client Liability

5r At the time of accepting instructions from a seller, you must point out and explain clearly to that client in your written
Terms of Business:

• that you may be entitled to a commission fee if that seller terminates your instruction and a memorandum of sale is issued by another agent to a buyer that you have introduced within 6 months of the date your instruction ended and where a subsequent exchange of contracts takes place.
  
  If no other estate agent is involved this time limit extends to 2 years.

https://www.tpos.co.uk/images/documents/rules-codes-obligations/residential-estate-agents/TPOE27-6_Code_of_Practice_for_Residential_Estate_Agents_A4_-_effective_from_1_Oct_2016.pdf

eddddy

davidmcn wrote: »

I can't make much sense out of that. Does "all other cases" mean those where the buyer wasn't introduced by them?

"All other cases" is supposed to refer to "buying through another Agency".

i.e. It's 6 months if the buyer buys through an estate agent, or 2 years "in all other cases" (i.e. if the buyer doesn't buy through an estate agent.)

TBH - even if the contract isn't clear, and/or the contract tried to impose 'harsher' terms on the seller...

... the Property Ombudsman's code of Practice is mandatory - so the Ombudsman would overule the contract.

davidmcn

eddddy wrote: »

"All other cases" is supposed to refer to "buying through another Agency".

Ok. It's still rubbish drafting.

getmore4less

That means to get round the 2 year you just get another agent to write up a memorandum of sale for a reduced fee as they have very little to do.

jcampbell784

Ahhh that makes me feel so much better! Thank you all for your help

giraffe69

When you switch agents you might get a list from the original agent of those they have introduced just so there isn't any argument later on.