Stung by Sole Agency Agreement - Am I stuffed?

Tibu3105

In late 2020, I listed my property with an Estate Agent who failed (miserably) to sell my house.  I gave notice which ended on 8 March 2021 and then relisted with another agency.  Unbeknownst to me, on 6 March, the original agent showed my house to a person who then went to the new agency and subsequently purchased my property.  At the time of giving my notice, I stated I would withdraw my notice if any of the last viewers expressed interest but didn't hear anything before the original contact expired.  I've now been contacted by a debt collection agency who say that my sole agency agreement applies and I owe the original agency their fees (Very shady that they didn't have the balls to contact me directly).  Do I have any leeway to argue against this or am I effectively screwed on this?  would appreciate any advice.

eddddy

Tibu3105 said:

Do I have any leeway to argue against this...

Is the estate agent a member of the Property Ombudsman Scheme? Most agents are.

If they are a member, it sounds like they've broken the Ombudsman's mandatory Code of Practice - so if you complain to the Ombudsman (after complaining to the EA), the Ombudsman is likely to decide that you don't have to pay.

But it's important that you get your complaint into the EA and then the Ombudsman, before the EA starts any court proceedings against you.

The Ombudsman is more 'biased' towards consumers than a court would be - so the Ombudsman is more likely to side with you than a court would be.


The Ombudsman's mandatory code of practice 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

Link: https://www.tpos.co.uk/images/codes-of-practice/TPOE27-8_Code_of_Practice_for_Residential_Estate_Agents_A4_FINAL.pdf

You seem to be saying that the first EA didn't give you that list of parties introduced. And as a result of that failure, you're faced with double fees.

(TBH, based on what you've said, I would think you have a very good chance that the Ombudsman would rule in your favour - but you can never be sure.)

steampowered

Try to find the terms & conditions you would have received from the original agent, and post them here. 

You need to read what the T&Cs say very carefully. Often the T&Cs have caveats you can rely on. 

eddddy

steampowered said:

Try to find the terms & conditions you would have received from the original agent, and post them here. 

You need to read what the T&Cs say very carefully. Often the T&Cs have caveats you can rely on. 

But just to clarify - if the EA is a member of the Property Ombudsman Scheme, the Ombudsman's Code of Practice will override whatever the T&Cs say.

So it's more important to read the Ombudsman's Code of Practice.



But this highlights the difference between complaining to the Ombudsman and going to court.

• The Ombudsman will make a decision based on the Code of Practice, as well as the EA's T&Cs
• A court will make a decision based on just the EA's T&Cs

So the OP is likely to get a better result by complaining to the Ombudsman, than by going to court.

Tibu3105

Thanks for the reply,  they are members of the Property Redress Scheme not the Ombudsman.   Further info on this as below:

1.  At no point did the EA advise me that the last viewer had expressed any interest in the property (having spoken with them, they apparently did say they liked the house but subsequently didn't hear anything back from them despite chasing.  They then saw the house relisted at a lower price with EA no2 so contacted the new agency,  eventually offering/negotiating at the lower price bracket).  

2.  Yes they did send me a list of viewers including the buyer but without any reference to the sole agency agreement.  TBH I really didn't connect the 2 until I received the email this week.

I've told the Collection agency that I intend to refer this to the Property Redress Scheme so they've asked to be kept informed of progress (they are acting reasonably well and non aggressive at this point + I have 14 days notice to pay so there's some time available before things get serious)

With hindsight I should obviously have paid more attention but is there any scope for appealing against this?  A friend of a friend has suggested the original EA cannot argue for effective cause of sale since the EA no2's listing and subsequent sale was at the lower price

Thanks again folks, any comments gratefully received.

saajan_12

Tibu3105 said:

Thanks for the reply,  they are members of the Property Redress Scheme not the Ombudsman.   Further info on this as below:

1.  At no point did the EA advise me that the last viewer had expressed any interest in the property (having spoken with them, they apparently did say they liked the house but subsequently didn't hear anything back from them despite chasing.  - well that's pretty normal, wouldn't say that's relevant
They then saw the house relisted at a lower price with EA no2 so contacted the new agency,  eventually offering/negotiating at the lower price bracket).  - that's your best argument.. that they were a non buyer at the price point that EA1 had. Debatable whether it'll work though.. 

2.  Yes they did send me a list of viewers including the buyer but without any reference to the sole agency agreement.  TBH I really didn't connect the 2 until I received the email this week. - the sole agency bit isn't relevant to the the list of names they think they've introduced. 

I've told the Collection agency that I intend to refer this to the Property Redress Scheme so they've asked to be kept informed of progress (they are acting reasonably well and non aggressive at this point + I have 14 days notice to pay so there's some time available before things get serious) - any fees / late charges yet? I'd argue against that at least

With hindsight I should obviously have paid more attention but is there any scope for appealing against this?  A friend of a friend has suggested the original EA cannot argue for effective cause of sale since the EA no2's listing and subsequent sale was at the lower price

Thanks again folks, any comments gratefully received.

There's 2 subtly different causes the first EA may have to claim:
1. Sole agency - during their contracted period, if you sell to another buyer found by another agent, then EA 1 would still have a claim regardless of whether they did anything with the buyer 
2. Effective cause of sale - for a period after their contract ends, if a buyer they instrumentally introduced goes on to buy, then they they have a claim regardless of sole selling / sole agency / multi agency contract. 

No 1. may not apply if you've terminated their contract with the correct notice etc. 
No 2. could apply - the buyer did view through EA1 and the they did provide the list of names.. 

eddddy

Tibu3105 said:

Thanks for the reply,  they are members of the Property Redress Scheme not the Ombudsman.   

OK - so a different angle. Looking at EA2 - the one you've paid.

Are they members of the Property Ombudsman Scheme?

The Property Ombudsman's Code of Practice says that an EA must:

5t

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-of-practice/TPOE27-8_Code_of_Practice_for_Residential_Estate_Agents_A4_FINAL.pdf

That's not completely clear - but it sounds like EA2 should have asked your buyer if they had already viewed, and assuming they said "yes", send them back to EA1.

But it does seem pretty clear that EA2 should have at least told you (disclosed) that the buyer had viewed through another agent. So you could take into account that you might have to pay double fees when considering their offer - and maybe rejected the offer, because of that.

So that would mean a complaint against EA2, in the hope of getting a refund.


I guess EA2 could claim that they asked the buyer, but the buyer fibbed and said they hadn't viewed... in which case you might have to get the buyer's side of the story.

canaldumidi

Tibu3105 said:

Thanks for the reply,  they are members of the Property Redress Scheme not the Ombudsman.

and what doe the Property Redress Scheme say?

Tibu3105

canaldumidi said:

Tibu3105 said:

Thanks for the reply,  they are members of the Property Redress Scheme not the Ombudsman.

and what doe the Property Redress Scheme say?

Nothing as yet since I need to follow the process i.e. submit a formal complaint to EA1 before referring to the PRS.   I'll be drafting that complaint in the next day or so.

Tibu3105

OK so letter sent to dispute claim on following grounds:
1. After viewing, interest was expressed however when potential buyer attempt to re-initiate contact, she did not get a response from the original EA - Not effective introducer
2. Failed to bring my attention to the 6mth clause when sending list of viewers - Failed to follow best practice as outlined by Ombudsman
3. Buyer contacted EA no2 after seeing property relisted at lower price therefore this was the Effective cause of sale.

I've given 8wks for a response (with expectation any further action is suspended pending the outcome).   Should they wish to reject my claim, I will then refer to the PRS which also forces them to deal with it directly rather than via the Collections company.  

I may still lose but not going to roll over yet.  Will keep this thread updated

eddddy

As I mentioned above, EA2 might be a bigger villain than EA1.

Is EA2 a member of the Property Ombudsman scheme?  If so, EA2 should have referred the buyer back to EA1. 

(So EA1 gets the fee, and EA2 gets nothing.)

Or, alternatively, EA2 should have warned you that you'd have to pay double fees if you accept the offer.

Tibu3105 said:

Failed to follow best practice as outlined by Ombudsman

You say that EA1 isn't a member of the Property Ombudsman Scheme - so their Code of Practice isn't really relevant.

(It's like if a hotel is a member of the 'Premier Inn' chain, you can't really complain that they didn't follow the 'Holiday Inn' code of practice.)