Agency agreement question - being asked for commission fee 2 years after selling

Happydays1234

An agency representing an EA has contacted us to pursue a commission fee from 2019 as they introduced the buyer. Here's the timeline:

26th April 2019 – Contract signed with EA for a 16 week agency period as stated on the agency agreement

29th July 2019 – We provided email notice of our intention not to renew the contract after the end of the 16 week period. This cancellation was acknowledged by EA

16th August 2019 – Contract ended

August 2019 - Signed with a new EA and paid fees up front with them

16th February 2020 – End of 6 month period 

21st February 2020 – Exchanged on our property, to a seller introduced by the original EA

They are claiming the fee under the following clause, however as we exchanged after the 6 month period we are questioning whether we are liable for the fee. Or because they introduced the buyer originally (during their 16 week contract period and they have evidence of this) are we liable anyways?

“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 six months after the expiry of the period during which the Countrywide Agency is in force and where the Seller has appointed another estate agent whose activities have resulted in the sale of the Property or twenty four months after the expiry of the Countrywide Agency in all other circumstances.”

user1977

Would help to see the whole contract, but it looks like the relevant period is 24 months as the buyer was introduced by the first agent rather than the subsequent one.

TBagpuss

Yes, it sounds as though the new agents activities didn't result in the sale, the buyer was introduced by the original agents, so as you exchanged within the 24 month period they are entitled to their fee. 

Thus is why you normally get a list of people the original agent has introduced and make sure that your contract with the new one is clear that you don't need to pay them if one of those people buys the property. 

davilown

Surely the act of giving a buyer a viewing doesn’t amount to them selling the property? I thought they had to be involved with the negotiations etc?

’ where the Court of Appeal ruled for an estate agent to claim commission it had to be involved in the sale, not just the introduction.’

Foxtons v Bicknell & Another, 2008

Happydays1234

davilown said:

Surely the act of giving a buyer a viewing doesn’t amount to them selling the property? I thought they had to be involved with the negotiations etc?

’ where the Court of Appeal ruled for an estate agent to claim commission it had to be involved in the sale, not just the introduction.’

Foxtons v Bicknell & Another, 2008

Yes good shout. We have comments back from the original EA that the buyer 'advised they are interested but haven't started their marketing yet'. There was no offer put through the original EA and we have evidence the buyer arranged a second viewing through EA2. I will use this thank you.

Mildreds_Earrings

Happydays1234 said:

davilown said:

Surely the act of giving a buyer a viewing doesn’t amount to them selling the property? I thought they had to be involved with the negotiations etc?

’ where the Court of Appeal ruled for an estate agent to claim commission it had to be involved in the sale, not just the introduction.’

Foxtons v Bicknell & Another, 2008

Yes good shout. We have comments back from the original EA that the buyer 'advised they are interested but haven't started their marketing yet'. There was no offer put through the original EA and we have evidence the buyer arranged a second viewing through EA2. I will use this thank you.

Based on the contract that you signed, the EA will be entitled to some payment though because their introduction resulted in the eventual sale.

Contact the EA and see if you can negotiate the fee. That's what we did and we eventually agreed to a 50% reduction. It was painful because like you, the EA weren't actually involved in the sale - we had sacked them by then but they did market the property and the Seller responded to their original advert, so we had to pay a fee. 

NortheastEA

There is another case you can use as courts stress only one commission should ever be paid. 

https://www.3pb.co.uk/agency-fees-the-interpretation-of-an-introduction/

3PB’s Alexander Whatley has successfully defended against a claim for an agency fee which turned on the interpretation of an ‘Introduction’. This is a widely contested issue in both the estate agency and recruitment agency sectors in the UK. The claim was defeated half-way through the trial by way of a successful submission, by 3PB commercial barrister Alexander Whatley, of no case to answer relying on Foxtons Ltd v Pelkey Bicknell [2008] EWCA Civ 419.

The Daily Mail and Property Industry Eye state this landmark ruling sends a clear message to agencies seeking to rely on an introduction to the property: there must be an introduction to the purchase. Homeowners do not have to pay commission to two estate agents after selling their home. Many agencies have a clause in their contract that states even if they do not make a sale, homeowners still pay commission. In this case the judge said the agency had to be involved in the sale, not just the introduction. The Dorset house was remarketing and sale by a second agency – at a lower price – to buyers who saw it originally on the first agency’s website but could not proceed at that time.