Estate Agent Demanding Fees After Sale Through Another Agent

Sheppo88

Olinda99 said:

you mention july and november 2023 but when did your contract with agent 1 end and when did you exchange and was there 6 months between those two dates?

Yes - it was 7 months.

GDB2222

Sheppo88 said:

Olinda99 said:

you mention july and november 2023 but when did your contract with agent 1 end and when did you exchange and was there 6 months between those two dates?

Yes - it was 7 months.

You obviously want people to tell you that you don’t owe Agent 1 anything, but you need to answer the questions that you are asked as precisely as possible. Otherwise, what could happen is that you'll hear what you want to hear, but lose in court.  That’s worse, because you will have court fees and interest added to the amount you owe. 

For calculating the 6 months, it is not clear whether the court will use the completion date for your sale, or the exchange date. 

It is not clear when your agency agreement ended. Normally, you would have to give several weeks notice to end the agency agreement. 

You are so close to the 6 months that you should not be celebrating just yet, I’m afraid. You probably should get qualified legal advice, which will cost quite a bit, and your lawyer may advise you to settle with agent 1 if you can. 

eddddy

Olinda99 said:

you mention july and november 2023 but when did your contract with agent 1 end and when did you exchange and was there 6 months between those two dates?

Assuming the estate agent's contract follows the Property Ombudsman's code of practice, it's not exchange of contracts or completion date that count - it's the date that a memorandum of sale was issued:

(That date would usually be a day or two after you accepted an offer.)

Here's what the code of practice says...

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-of-practice/TPOE27-8_Code_of_Practice_for_Residential_Estate_Agents_A4_FINAL.pdf

But... the key question is: Is the second estate agent a member of The Property Ombudsman Scheme (TPOS)?

If they are, it sounds like they've broken TPOS code of practice.

The code of practice says the second estate agent should have referred the buyer back to the first estate agent.

So you might have a case for claiming your fee back from the second estate agent, so you can pay the first estate agent.

Here's the relevant terms from TPOS code of conduct:

...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

GDB2222

eddddy said:

Olinda99 said:

you mention july and november 2023 but when did your contract with agent 1 end and when did you exchange and was there 6 months between those two dates?

Assuming the estate agent's contract follows the Property Ombudsman's code of practice, it's not exchange of contracts or completion date that count - it's the date that a memorandum of sale is issued:

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-of-practice/TPOE27-8_Code_of_Practice_for_Residential_Estate_Agents_A4_FINAL.pdf

But... the key question is: Is the second estate agent a member of The Property Ombudsman Scheme (TPOS)?

If they are, it sounds like they've broken TPOS code of practice.

The code of practice says the second estate agent should have referred the buyer back to the first estate agent.

So you might have a case for claiming your fee back from the second estate agent, so you can pay the first estate agent.

Here's the relevant terms from TPOS code of conduct:

...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

Interesting point about TPOS. Wouldn’t the OP have needed to give agent 2 a list of introductions from agent 1? 

Sheppo88

Estate Agency Terms and Conditions

Below is an outline of the key terms and conditions related to marketing a property with an estate agent. This information may be helpful for anyone navigating a similar agreement:

Energy Performance Certificate (EPC):

• It is a legal requirement to have an EPC to market a property.
• Unless agreed otherwise, the agent will provide the EPC on your behalf.

Commission Fees:

• Commission is payable as per the "Fee Entitlement" clause in the agreement.
• If you withdraw the property before the contract period ends or fail to give the required notice, an administration fee of £250.00 + VAT (£300.00 total) applies.

Marketing Period:

• The agent will act as a Sole Agent for a minimum of 8 weeks.
• After the initial period, the agreement continues unless 30 days’ written notice is given by either party.
• If another agent is appointed during this time, dual fee liability is created.

For Sale Board:

• The agent may display a “For Sale” board unless otherwise instructed.

Fee Entitlement:

• Fees are due if the agent introduces a buyer who exchanges contracts for the sale of the property during the agency period.
• Fees may also apply if the property is sold to a buyer introduced by the agent within six months after the agreement ends.

EPC Compliance:

• EPCs must be obtained within 28 days of marketing. Marketing may be suspended if an EPC is not provided.

Right to Cancel:

• If the agreement is signed outside the agent’s premises, you have a 14-day cooling-off period.
• Marketing can begin immediately if you waive the cooling-off period.

General Terms:

• The agent reserves the right to use sub-agents, market the property at a flexible asking price, and offer additional services (e.g., financial services, surveys).
• The agent retains copyright for marketing materials.
• You must ensure the property is safe for visitors during viewings.

Final Selling Price:

• Includes the sale price of the property, fixtures, fittings, and any other incentives agreed upon between buyer and seller.

Data Protection:

• The agent will process personal data in line with GDPR. Data may be shared with relevant service providers.

Payment Terms:

• Fees and VAT must be paid in full at completion through your solicitor or conveyancer.

Ombudsman Membership:

• The agent is a member of a property ombudsman scheme, and unresolved complaints can be referred to the ombudsman.
  

Sheppo88

Above is the T&Cs and agreement.

eddddy

GDB2222 said:

Interesting point about TPOS. Wouldn’t the OP have needed to give agent 2 a list of introductions from agent 1? 

I would interpret this term from the Code of Practice....

"establish if an interested party has previously viewed through another agent;" 

... as meaning "Ask anyone who wants to view the property 'have you viewed this property before'"



Having said that, TPOS Code of Practice requires the first estate agent to provide a list of interested parties:

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

Plus the second estate agent should have warned the OP about the risks:

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

- specifically advise of the possible liability to pay more than one agent;

eddddy

Sheppo88 said:

Estate Agency Terms and Conditions

Below is an outline of the key terms and conditions related to marketing a property with an estate agent. This information may be helpful for anyone navigating a similar agreement:

<snip>

Sheppo88 said:

Above is the T&Cs and agreement.

I'm not sure where you got those "Estate Agency Terms and Conditions" from, but that wording won't be the estate agent's contract or agreement.

Just FYI - They look like some poorly written and inaccurate notes about estate agents agreements. Those notes are so bad, I would completely ignore them.

GDB2222

eddddy said:

GDB2222 said:

Interesting point about TPOS. Wouldn’t the OP have needed to give agent 2 a list of introductions from agent 1? 

I would interpret this term from the Code of Practice....

"establish if an interested party has previously viewed through another agent;" 

... as meaning "Ask anyone who wants to view the property 'have you viewed this property before'"



Having said that, TPOS Code of Practice requires the first estate agent to provide a list of interested parties:

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

Plus the second estate agent should have warned the OP about the risks:

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

- specifically advise of the possible liability to pay more than one agent;

It could be more complicated if agent 2 asked for a list of people previously introduced and the OP didn’t supply the list, or said that there were none? 

eddddy

GDB2222 said:

It could be more complicated if agent 2 asked for a list of people previously introduced and the OP didn’t supply the list, or said that there were none? 

Yes.

Realistically, if the estate agent insisted on their fee, the OP would have to complain to the Property Ombudsman.

The Property Ombudsman would look at what happened, and decide whether the the estate agent had treated the OP fairly (and acted reasonably).

• If the estate agent had failed to ask the OP relevant questions, the Ombudsman would probably say the estate agent hadn't been fair and reasonable (and therefore might say that the estate agent has to refund all/part of the fee).

• But if the estate agent had asked the OP all the relevant questions, but the OP had lied or withheld partial information or mislead the estate agent etc - then the Ombudsman might decide that the estate agent had been fair and reasonable. (So no refund.)

BUT a really important thing to note...

The stuff we're discussing is all in TPOS code of practice It's (probably) not in the estate agent's contract. And the TPOS Code of Practice says things like a seller must be treated fairly.

So it would be important for the OP to proactively complain to TPOS.

If the OP waits for the estate agent to claim the fee via the courts, the court will probably only consider the estate agent's contract. They probably won't consider breaches of TPOS code of practice, because they are not part of the law.

So the OP should complain to TPOS quickly, before the estate agent starts court proceedings.