Help On Estate Agent Contract Clarity Needed

Rosesgirl

Can anyone advise i have been told by my estate agent if my buyer withdraws we still owe them full fees . Can anyone give me any clarity on the wording of the contract . 
It states if " you withdraw from a proposed sale after a sale has been agreed { which includes a sale agreed subject to contract} and solicitors have been instructed you will be liable to pay us the fee notwithstanding that unconditional contracts for the sale of the property have not been exchanged such fee and additional charges to be paid within 7 days of demand"

Thanks 

eddddy

The contract says "if you withdraw from a proposed sale" - which is standard in  quite a lot (but not all) estate agent contracts.

It doesn't say "if the buyer withdraws".

So on the basis of the clause you quote, no fee is payable if the buyer withdraws.  But there may be other relevant clauses.


But TBH, I've only ever once come across an estate agents contract where they wanted a fee (75% of their full fee) if the buyer withdraws - and I decided not to touch that agent with a bargepole.


The key thing is to keep making it clear to your solicitor, your buyer and the estate agent that you are not withdrawing.

(The challenge is if you think the buyer is a time-waster who is stringing you along, but you don't want to withdraw, because you become liable for a fee.)


And ask the estate agent to tell you which clause in their contract makes you liable for a fee, if the buyer withdraws. (And ignore any puff that they talk at you - insist that they tell you which clause in the contract.)

canaldumidi

How far have you got with your sale? Personally I'd get the EA to remove that clause from the contract, or choose a different EA.

But it may be too late for that.

Rosesgirl

My understanding exactly is that it is not us that is withdrawing, the buyer refuses to wait any longer than October, so that's why I'm puzzled, my understanding of the above contract is if we withdraw we would be liable even if contracts have not been exchanged as I think the crucial word is " notwithstanding" which means in spite of contracts not being exchanged.

 Due to Covid the sale has dragged on for the buyer and I personally think the estate agent want their money house sold or unsold so they can have us off their books 

canaldumidi

Who is withdrawing? You or your buyer?

If " the buyer refuses to wait any longer" then it is the buyer who is withdrawing. The clause says if "you withdraw from a proposed sale.....you will be liable to pay us...".

Sso no fee will be payable as you are not withdrawing.

The 'notwithstanding' is a red herring.

eddddy

Rosesgirl said:

My understanding exactly is that it is not us that is withdrawing, the buyer refuses to wait any longer than October, so that's why I'm puzzled, my understanding of the above contract is if we withdraw we would be liable even if contracts have not been exchanged as I think the crucial word is " notwithstanding" which means in spite of contracts not being exchanged.

You're correct in saying "notwithstanding that unconditional contracts for the sale of the property have not been exchanged" means "even if contracts haven't been exchanged".

So the whole clause is essentially "if you withdraw, you have to pay our fee, even if contracts haven't been exchanged".


(I'm not sure why you say the word "notwithstanding" is crucial - it makes no difference. The whole sentence doesn't apply, because you are not withdrawing.)

 

badger09

See OP's other thread re conveyancer advising against exchange until she has rental accommodation secured. Provides some context.

https://forums.moneysavingexpert.com/discussion/6296616/question-on-estate-agent-fees-etc#latest

firebubble

The purpose of the clause is if you, as seller, change your mind about selling (ie you withdraw) once the EA has done all the sales work, found a buyer, agreed a price etc. That's perfectly reasonable, as it dissuades timewasters.

The EA can't charge you anything if a buyer pulls out prior to exchange of contracts - it's completely out of your control, and even the EA's control. 

The only possible issue would be if you are clearly dithering, eg making the sale more difficult, refusing to provide documents to your solicitors, etc, so the sale is taking forever and can't reach the point of exchange. Then they might have a case, but really, it wouldn't be worth their time to sue you (as well as the reputational issue locally) to obtain this fee, and there's no guarantee they'd be successful anyway, so they'd be better just dropping any effort to market your property and let the contract expire.

Assuming you are not the issue, if the EA thinks the buyer is pulling out then the EA needs to get the property back on the market and find a new buyer.

pinkshoes

Is the EA trying to say that by insisting on not exchanging until you find a suitable rental then you are preventing exchange so it is YOU causing the buyer to pull out of the sale?

If you need to move into rental then of course you should secure a rental property before exchanging, as otherwise where do they expect you to go?!?! If the buyer needs to wait as there is nothing suitable you want to rent at the moment, then so be it, they will need to wait. If they don't want to wait then they can pull out of the sale, and no fee will be due.

Rosesgirl

pinkshoes said:

Is the EA trying to say that by insisting on not exchanging until you find a suitable rental then you are preventing exchange so it is YOU causing the buyer to pull out of the sale?

If you need to move into rental then of course you should secure a rental property before exchanging, as otherwise where do they expect you to go?!?! If the buyer needs to wait as there is nothing suitable you want to rent at the moment, then so be it, they will need to wait. If they don't want to wait then they can pull out of the sale, and no fee will be due.

Yes that is exactly what the estate agent is saying . I was told the buyer will only wait until October because i wanted to complete a month later and the estate agent phoned and said the buyer will not wait any longer than October and i have spoke to my manager and if that is the case you owe us fee of £1986. With Covid it has delayed things and the buyer has had enough i get that but it is unfair to exert and threaten me like this ....

pinkshoes

Rosesgirl said:

pinkshoes said:

Is the EA trying to say that by insisting on not exchanging until you find a suitable rental then you are preventing exchange so it is YOU causing the buyer to pull out of the sale?

If you need to move into rental then of course you should secure a rental property before exchanging, as otherwise where do they expect you to go?!?! If the buyer needs to wait as there is nothing suitable you want to rent at the moment, then so be it, they will need to wait. If they don't want to wait then they can pull out of the sale, and no fee will be due.

Yes that is exactly what the estate agent is saying . I was told the buyer will only wait until October because i wanted to complete a month later and the estate agent phoned and said the buyer will not wait any longer than October and i have spoke to my manager and if that is the case you owe us fee of £1986. With Covid it has delayed things and the buyer has had enough i get that but it is unfair to exert and threaten me like this ....

What does it say in your contract about the time scale on exchanging?

I would just email the EA, state you are NOT withdrawing from the sale, part of the sale agreement was that you needed to find suitable rental accommodation, and if the buyer is not happy to wait then they are not a suitable buyer and could they therefore please re-market the property and find a buyer who is suitable.