Prev. estate agent demanding fee

queen30

Hi,
I’m hoping someone may be able to offer some advice. I had my house for sale with an estate agent in a sole selling contract. House wasn’t in a great state so didn’t get much viewings etc. Once the contract/time was up I gave the agreed notice and took the house off of the market. They sent the usual list of who they’d “introduced” to the property. I did a few small improvements and 6 months later put it back up for sale with a different estate agent. It sold with this estate agent which took 2-3 months. I have been out of that house for a few months now. I have recently had an email from the first agent stating I owe them the commission as they introduced the buyer to the house originally. (I actually sent the list the first estate agent sent to the second agent so that this would not happen but clearly they didn’t pay attention!) my question is, seeing as it was 6 months later can they actually ask for commission?! Secondly, surely IF they do have a leg to stand on then the second agent should deal / negotiate with them as I sent them the list which they ignored? 

In the email the first agent sent they actually stated that we’d sold the house 2 months before we actually did so they have their facts wrong anyway so I think they are trying it on but I still would like to know where I stand with this if someone can help me please?

Thank you! 

TN1984

Was it sold to someone on that list the first agent sent then? What did your first sole agency contract say in respect of those potential buyers introduced during your contract?

queen30

TN1984 said:

Was it sold to someone on that list the first agent sent then? What did your first sole agency contract say in respect of those potential buyers introduced during your contract?

Was sold to someone on that list yes :-( it says.....

In our Agreement you agreed to pay us a fee of 1% plus VAT in each of the following circumstances:

 

1. if unconditional contracts for the sale of the property are exchanged in the period during which we have sole selling rights, even if the purchaser was not found by us but by another agent or by any other person, including yourself;
2. if unconditional contracts for the sale of the property are exchanged after the expiry of the period during which we have sole selling rights but to a purchaser who was introduced to you during that period or with whom we had negotiations about the property during that period.

But surely they don’t have sole selling rights over the property over anyone who saw the property forever? There has to be a time limit surely?

thank you 

Bossypants

Possibly not 'forever' - if you'd taken the house off the market then sold it 10 years later, they might struggle - but you're talking about less than a year here, which really isn't that long in the world of house buying. It sounds to me as though you owe them the money, but arguably could claim it back from your other EA because they should have checked the list and known (but so should you!).

Davesnave

The second agent has no contract with the first, but you do. That's why Agent 2 couldn't care less whether you have to pay Agent 1 or not.

The moral is to rely on your own diligence

davidmcn

Bossypants said:

It sounds to me as though you owe them the money, but arguably could claim it back from your other EA because they should have checked the list and known (but so should you!).

I think this is most likely to be the correct answer (depending on what the contract with the 2nd agent said). It's not for the agents to sort out between themselves - they don't have contracts with each other, only with you.

wilfred30

I think your mistake was relying on the competence of Agent 2.
Once you knew the name of the buyer, it was your responsibility to check the list yourself.
Therefore, I think that you do have to pay Agent 1.

eddddy

Two things to check:

• Is the first agent a member of the property ombudsman scheme? (Most EAs are.)
• Were there 6 months or more between the contract with the first EA terminating, and the 2nd EA issuing the memorandum of sale?

If the answer to both those questions is "yes", the first EA can't claim a fee.

The first EA would be breaking the Property Ombudsman's mandatory code of practice - so you should complain to the ombudsman. Here's an extract from the mandatory code:

5t At the time of receiving instructions from a seller you must:
- point out and explain clearly 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 (see definition of effective introduction (*) and supplementary TPO ‘Dual Fee’ guidance) within 6 months of the date your instruction ended and where a subsequent exchange of contracts takes place.

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

queen30

Two things to check:

• Is the first agent a member of the property ombudsman scheme? (Most EAs are.)
• Were there 6 months or more between the contract with the first EA terminating, and the 2nd EA issuing the memorandum of sale?

If the answer to both those questions is "yes", the first EA can't claim a fee.

The first EA would be breaking the Property Ombudsman's mandatory code of practice - so you should complain to the ombudsman. Here's an extract from the mandatory code:

5t At the time of receiving instructions from a seller you must:
- point out and explain clearly 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 (see definition of effective introduction (*) and supplementary TPO ‘Dual Fee’ guidance) within 6 months of the date your instruction ended and where a subsequent exchange of contracts take


Thank you this helps a lot! 

 Thank you thy helps.

The first EA have said this: 
The 6 month limitation that you have quoted is from the Code of Practice for Residential Estate Agents issued by The Property Ombudsman (“TPO”), copy attached. This guidance is mandatory for all TPO Members. We refer you to Clause 13. Customer Services and Complaints of the Terms, which explains that we were members of the Ombudsman Services: Property (“OSP”) at the time you signed the Terms, not members of the TPO. Please note that we are now members of the Property Redress Scheme (“PRS”), as explained in the attached Complaints Procedure.

I have been in contact with second agent who’ve said they can’t now claim commission but I suppose they’re going to say that.

Thanks again 

eddddy

queen30 said:Thank you thy helps.

The first EA have said this: 
The 6 month limitation that you have quoted is from the Code of Practice for Residential Estate Agents issued by The Property Ombudsman (“TPO”), copy attached. This guidance is mandatory for all TPO Members. We refer you to Clause 13. Customer Services and Complaints of the Terms, which explains that we were members of the Ombudsman Services: Property (“OSP”) at the time you signed the Terms, not members of the TPO. Please note that we are now members of the Property Redress Scheme (“PRS”), as explained in the attached Complaints Procedure.

I have been in contact with second agent who’ve said they can’t now claim commission but I suppose they’re going to say that.

Thanks again 

OK - Is the second EA a member of the TPO?

If so, did they follow the the following parts of the code of practice? If not, you might have grounds for a complaint to the TPO against them (and maybe the TPO might tell the second EA to refund part/all of their fee) :

5t
- ask the seller if they have previously instructed another agent in respect of the property, and if advised yes:

- ask to see a copy of the previous agency agreement to ensure that by instructing you, the seller will not be in breach of contract (note that if the seller is unable or refuses to supply a copy, you must advise, in writing, that you are unable to advise as to whether the seller is in breach of their agreement with the previous agent);

- specifically advise of the possible liability to pay more than one agent; • establish if an interested party has previously viewed through another agent;

- if an interested party has previously viewed through another agent and makes an offer through you, you must disclose this information and refer the sale back to that agent as they will be deemed to have introduced the buyer (please refer to supplementary TPO ‘Dual Fee’ guidance).

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

queen30

eddddy said:

queen30 said:Thank you thy helps.

The first EA have said this: 
The 6 month limitation that you have quoted is from the Code of Practice for Residential Estate Agents issued by The Property Ombudsman (“TPO”), copy attached. This guidance is mandatory for all TPO Members. We refer you to Clause 13. Customer Services and Complaints of the Terms, which explains that we were members of the Ombudsman Services: Property (“OSP”) at the time you signed the Terms, not members of the TPO. Please note that we are now members of the Property Redress Scheme (“PRS”), as explained in the attached Complaints Procedure.

I have been in contact with second agent who’ve said they can’t now claim commission but I suppose they’re going to say that.

Thanks again 

OK - Is the second EA a member of the TPO?

If so, did they follow the the following parts of the code of practice? If not, you might have grounds for a complaint to the TPO against them (and maybe the TPO might tell the second EA to refund part/all of their fee) :

5t
- ask the seller if they have previously instructed another agent in respect of the property, and if advised yes:

- ask to see a copy of the previous agency agreement to ensure that by instructing you, the seller will not be in breach of contract (note that if the seller is unable or refuses to supply a copy, you must advise, in writing, that you are unable to advise as to whether the seller is in breach of their agreement with the previous agent);

- specifically advise of the possible liability to pay more than one agent; • establish if an interested party has previously viewed through another agent;

- if an interested party has previously viewed through another agent and makes an offer through you, you must disclose this information and refer the sale back to that agent as they will be deemed to have introduced the buyer (please refer to supplementary TPO ‘Dual Fee’ guidance).

Did not know any of this....thank you for your assistance! I have looked on the website and they are a member so if all else fails I shall take this route. 

Many Thanks