help understanding estate agents terms

starving_artist

I thought estate agents were now required to use clear and easy to understand language! Can some kind soul with more experience of this have a read and tell me if I have this right:



"The Commission Fee will be payable whether the introduction is a direct introduction or an indirect introduction (where the Buyer makes a purchase as a result of becoming aware that the Property was for sale through the marketing of the Property by the Agent) and whether or not the Buyer makes the offer to purchase through another Agent or through any other person."


"The Seller will be liable to pay the Commission Fee to the Agent, in each of the following circumstances:
- if unconditional contracts for the sale of the Property are exchanged in the period during which the Agency Period is in fore, even if the Buyer was not found by the Agent but by another agent or by another person, including the Seller
-if unconditional contracts for the sale of the Property are exchanged after the expiry of the Agency period but to a Buyer who was introduced to the Seller during that period or with whom the Agent had negotiations about the Property during that period.
However the Seller will not be liable to pay the Commission Fee in any of these circumstances if the unconditional contracts for the sale of the Property are exchanged 6 months after the expiry of the Agency period and where the Seller has appointed another estate agent whose activities have resulted in the sale of the Property
On expiry of the Agency Period, unless terminated by either side by a minimum of 14 days written notice on the last day of the Agency Period, the agency shall continue until either:
- it is terminated by either the Seller or the Agent on 14 days written notice or

- the Seller by 14 days written notice to be served not earlier than the last day of the Agency Period converts into a Multiple Agency, which Multiple Agency shall then continue on ther terms set out below or
-the Seller appoints another agent without giving any or any adequate notice, in which case the Agency period will continue to apply save that the Multiple Agency Commission Fee would be payable if a fee becomes due."


Does this mean:
- the agent has not just sole agency rights but sole selling rights?
- the agent has a right to commission fees if the property is sold within six months after they stop acting for me? is this what is called a 'tie in'?

- I have to wait until the last day of the Agency Period to give 14 days notice if I want to cancel them as my agent? I can't find anything in the T&C's which actually says how long the Agency Period is.


Are these standard terms?


Thanks!

[Deleted User]

1. Yes the agent has sole selling rights. If you sell it to your friend and you agree it down the pub, you will still owe the agent commission if you are in contract

2. If the property is sold within 6 months of the contract end date to someone they introduced then they will be eligible for the commission.

3. That is usually on a different part and is sometimes handwritten by the agent after negotiation over thr length of tie in. If you can't find it, email them and ask so its in writing

eddddy

Deleted_User wrote: »

2. If the property is sold within 6 months of the contract end date to someone they introduced then they will be eligible for the commission.

Just to be pedantic, it's actually:

2. If the property is sold within 6 months of the contract end date to someone [STRIKE]they introduced[/STRIKE] who was introduced by anyone during the Agency period, then they will be eligible for the commission.



Regarding....

starving_artist wrote: »

On expiry of the Agency Period, unless terminated by either side by a minimum of 14 days written notice on the last day of the Agency Period, the agency shall continue until either:

At first sight, it does read as though...

starving_artist wrote: »

- I have to wait until the last day of the Agency Period to give 14 days notice if I want to cancel them as my agent?

But that would be breaching the Property Ombudsman's mandatory code of practice.

5s Your contract must allow for the required notice of termination to be given before the end of the term, such that termination by the client can occur at the expiry of the minimum term.

Link:https://www.tpos.co.uk/images/Codes_2019_a5/TPOE27-8_Code_of_Practice_for_Residential_Estate_Agents_A5_-_Effective_1_June_2019.pdf

I think you can also read that clause in the EAs contract as:

"If the agreement is terminated on the last day of the Agency Period - by giving notice at least 14 days in advance..."

Which would make it compatible with the TPOS code of practice.

starving_artist

Deleted_User wrote: »

2. If the property is sold within 6 months of the contract end date to someone they introduced then they will be eligible for the commission.

Thanks very much for translating it very clearly. On point 2 though does it not include sales within 6 months where they have not made the introduction? ie. if I sell it to a friend down the pub after I have ended their contract but within six months.

eddddy

starving_artist wrote: »

Thanks very much for translating it very clearly. On point 2 though does it not include sales within 6 months where they have not made the introduction? ie. if I sell it to a friend down the pub after I have ended their contract but within six months.

As I mention above - it's the 'introduction' date that's important.

• So if you 'introduced' your friend after the agency period had ended, there's no fee to pay - under any circumstances.

• But if you 'introduced' your friend during the agency period, and the friend goes on to buy you will have to pay a fee, (and the time limit isn't 6 months, in the circumstances you describe).

(An 'introduction' might be when you tell your friend that your house is for sale, and show them round.)





The time limit is only 6 months ...

... where the Seller has appointed another estate agent whose activities have resulted in the sale of the Property

In your example, you haven't appointed another agent. So the 6 month limit doesn't apply.

The contract doesn't mention a time limit, but the property ombudsman would limit it to 2 years.

G_M

Either get the terms changed, or find another agent......

Mutton_Geoff

I would not sign a sole selling rights contract. You never know what will happen whilst you have the property for sale.


I've recently had Savills round for a valuation and they waved a sole selling rights contract under my nose. Unfortunately the "gotcha" in there is "where the Buyer makes a purchase as a result of becoming aware that the Property was for sale through the marketing of the Property by the Agent" will even include a friend of yours seeing the board up outside your house and making a direct offer with no contact through the agent.


For that reason, I avoid agents boards, I don't see any advantage at all for the seller, it's just free advertising for the agent since almost all buyers will come from a Rightmove link or is already known to the agent in which case, the agent should not need to tie you up in knots with a contract like this.


Most people seem unaware they can edit the agents contract to suit themselves and cross out or amend anything they don't like. If the agent still wants your business, they will agree to it.


I wouldn't trust agents to do their best for you, I have first hand experience of an agent who agreed 1% instead of their standard 2% crossed out the printed 2% and entered 1% on my copy but had left a piece of card between the pages so the office copy still showed 2%. When the house sold and the fees were disputed and escalated via the Ombudsman, they decided it "could not be determined who altered the contract" so the 2% was payable. This is a large agent in Essex.


I've cancelled an agents contract after the agreed period, asked them for copy of who they considered they'd introduced to pass to new agent (next door in same High Street). They refused. When house sold, I was presented with invoice from first agent, turns out buyer had viewed property with first agent and made an offer, but the agent had not got back to them so they thought I wasn't interested. I was never made aware of the viewing nor offer (I'd had no offers via the first agent).


This I took to court and lost as the judge said that despite the agents poor performance, the contract contained no performance related clauses so was still valid.


For this reason, I read every word of an agents contract and cross out or amend anything I don't like. I would only agree to sole agency over a 6 week initial term and max 1% fee. If the agent doesn't want my business, I'd go somewhere else, but my last 3 sales conducted this way, the agents all agreed and the sales went smoothly. Don't be shy to negotiate your own terms.

eddddy

Mutton_Geoff wrote: »

I've cancelled an agents contract after the agreed period, asked them for copy of who they considered they'd introduced to pass to new agent (next door in same High Street). They refused. When house sold, I was presented with invoice from first agent, turns out buyer had viewed property with first agent and made an offer, but the agent had not got back to them so they thought I wasn't interested. I was never made aware of the viewing nor offer (I'd had no offers via the first agent).

This I took to court and lost as the judge said that despite the agents poor performance, the contract contained no performance related clauses so was still valid.

FWIW, if the agent was a member of The Property Ombudsman Scheme (most are), it's better to avoid court and complain to the ombudsman.

They are more biased towards a consumer than a court is. They look at "fairness" as well as contractual terms etc.

And the Property Ombudsman's mandatory code of practice now explicitly says:

5u At the time of the termination of the instruction, you must explain clearly in writing any continuing liability the client may have to pay you a commission fee and any circumstances in which the client may otherwise have to pay more than one commission fee. Your explanation must include a list of parties that you have introduced to the property.

https://www.tpos.co.uk/images/Codes_2019_a5/TPOE27-8_Code_of_Practice_for_Residential_Estate_Agents_A5_-_Effective_1_June_2019.pdf

But I think that's a recent addition.

So under the current rules, you would almost certainly win in a complaint to the ombudsman.

Mutton_Geoff

eddddy wrote: »

So under the current rules, you would almost certainly win in a complaint to the ombudsman.

Yes, it went via Ombudsman first who supported the agent. This didn't surprise me since the Ombudsman is funded by the agents and this particular agent was part of Countrywide PLC (owners of Rightmove) who, during proceedings, I discovered have a whole department in Birmingham that sifts through new Land Registry records and then cross checks whether the new owners were ever signed up to one of their agents.


Hence beware of sole selling rights clauses (mine wasn't).