Ready willing and able buyer clause - dispute with estate agent - who is right?

hiohaa

I'm selling a property. I have a clause in the 'no sale no fee' section of a contract i entered into with an estate agent. 
The clause reads: 

"A buyer is ready, willing and able if they are prepared and are able to exchange unconditional contracts for the purchase of your property. If such a buyer is introduced by the Agent, in accordance with your instructions, our fee will become due even if unconditional contracts for the sale are not exchanged". 

I did not understand the implications of this at the time, nor was it explained to me. 
I accepted an offer in January this year. At the time I've been told the buyer did have a mortgage in principle in place. 
They did not start the conveyancing process till mid-April. 
The buyers solicitors are still waiting for a mortgage offer from the buyer. 
We are now almost 6 months in and there is no progress, and the buyers solicitors have not been able to provide any evidence of the buyers status regarding the mortgage offer - they are still waiting for it. 

I want to terminate the offer as a result. The estate agent insists I will have to pay them their fee if I don't want to sell, because of the above clause.  
I'm saying that the buyer has never been Ready Willing and Able to exchange unconditional contracts at any point till now, therefore I should not be charged any fee. 

The agent says they will take me to court if I don't pay. 

What do you think? I feel like this is very unfair and I don't know on what grounds the estate agent is using to justify their position. 
I don't know what to do anymore. 
Can anyone provide any advise at all? what would you do? 
thank you. 

anselld

I would say they are not ready or able but the only way to find out for sure is to call the Agent's bluff.  Are you wanting to come off the market all together or move to another agent.  Perhaps they would be more willing to re-market the property and find another buyer.

km1500

these are a ruling from the property ombudsman if it helps

https://www.tpos.co.uk/news-media-and-press-releases/case-studies/item/ready-willing-able-case-2


also


https://forums.moneysavingexpert.com/discussion/6275774/ready-willing-and-able-buyer/p1

ss2020jd

If they don’t have a mortgage offer then I can’t see how they fulfil the ‘able’ part to buy the property. But I am not a legal expert. As far as I understand it the EA should ensure that the buyer is proceedable. What was the explanation for not starting the conveyancing process until several months after offer?

Can you ask your own solicitor for advice on this? Or if you have legal advice cover as part as your home insurance policy you could also try them. 

Are the agents a member of the property ombudsman? 

https://www.tpos.co.uk/

GDB2222

km1500 said:

these are a ruling from the property ombudsman if it helpsi

https://www.tpos.co.uk/news-media-and-press-releases/case-studies/item/ready-willing-able-case-2

I don’t think highly of TPOS. That case is very similar to the OP's, where the buyer is clearly not able to proceed, yet the agent harassed the seller for payment. TPOS ordered the agent to withdraw their invoice,but there was no order to compensate the client for the distress that must have been caused, and there was no naming and shaming of the agent. 

shiraz99

They may be be willing but the buyer doesn't satisfy the ready and able part as they're nowhere near in a position to exchange contracts.

ss2020jd

GDB2222 said:

km1500 said:

these are a ruling from the property ombudsman if it helpsi

https://www.tpos.co.uk/news-media-and-press-releases/case-studies/item/ready-willing-able-case-2

I don’t think highly of TPOS. That case is very similar to the OP's, where the buyer is clearly not able to proceed, yet the agent harassed the seller for payment. TPOS ordered the agent to withdraw their invoice,but there was no order to compensate the client for the distress that must have been caused, and there was no naming and shaming of the agent. 

True but the fact that the fee was not payable under those circumstances does show that the EA should be challenged. 

BarelySentientAI

A common complaint about RWA clauses - they should be able to demonstrate each of those three parts which in your case they cannot.

Formal complaint and Ombudsman might be necessary.

AskAsk

My in-laws got out of one recently by the skin of their teeth.  Never ever sign a contract like that but not everyone knows about these contracts to look out for these clauses.

Your buyer is not able so that clause is not active. Were you going to put the property back on the market with the same EA?  They tend to be less bothered if you put the property back with them as they can re-advertise it again and so will get their fees eventually.

It becomes an issue if you go with someone else or take the property off the market altogether.  I would fight this one that in no way does the buyer is able as they have not been able to obtain a mortgage.

These clauses should be unenforceable and should be limited to costs incurred and not actual commision as the property has not sold for commission to be paid.

eddddy

hiohaa said:

The agent says they will take me to court if I don't pay. 

Assuming the estate agent is a member of the Property Ombudsman Scheme, and it gets to the stage that the estate agent issues an invoice, you should complain to the Ombudsman quite quickly.

If you wait until the estate agent starts court proceedings, the Ombudsman will no longer get involved. 

NameUnavailable

If the buyer hasn't got a mortgage offer and can't pay in cash then I don't see how they are ready or able (they may be willing but I'd question that too if they're dragging it out for so long!).

I'd have told the agent to keep marketing the property.