Estate Agent Contract Timescales

Pendsive

I had a contract with an estate agent back in 2021 to sell a property and the agent had a buyer for the property (a possible ready, willing and able buyer) even though I don't think they had sold their property and no surveyor ever came to my property. I then had a parent that got seriously ill and needed to stay in the property as the hospital and doctors were very close.by. The potential buyers were sympathetic to the situation and also the estate agent was very sympathetic as well and it was agreed that the property would be taken off the market before the contract was up. I asked if I would have to pay the cancellation fee for the early ending of the contract and they said it would be referred to their accounts department who would get in touch with me. But no one ever got in touch with me by letter, email or phone and that was how it ended.

Now sadly this parent has passed away and I am thinking of selling the property and am in a dilemma as to whether I should approach the same agent again to sell the property, as this could jig their memory about the forgotten cancelled contract etc. Because as there was no contact from them at the time, I'm not sure if they had just forgotten about it or that they were just being sympathetic to the situation at the time. Or should I just go to a different agent but I am aware that if I do this and when properties come up for sale in an area, most agents become aware of it anyway and this may make the original agent more irate about the situation?

It has been about 3 and half years since the contract ended, so can they legally chase me for any unpaid fees? I've also noted that they are a member of the Property Ombudsman which I know sets down the rules that estate agent have to follow  and have seen things like 6 months an 2 years for certain things.

My gut instinct tells me that the agent was being sympathetic at the time and therefore I should go back to this agent, but would like to get opinions regarding estate agent timescales for things like this before I press forward.

All replies much appreciated     


   

saajan_12

I'd just focus on who you think would be the best agent. If you had a good experience then stick with them, if not then go elsewhere. 

The 6m / 2y limits refer to when the introductions or sales happened to trigger a liability. If you were liable during that period then they have 6 years to actually chase the money, so no change there. 

If anything, continuing with the same agent may be seen as continuing the same contract, just with a period of no active marketing, so hard for them to collect twice. 

eddddy

You probably need to be a bit more precise about what happened.

Typically, most estate agents contracts work like this:

• 1) You enter into the contract

• 2) You can cancel the contract within the first 14 days 

• 3) There is a minimum contract period (maybe 8, 10, 12 or 20 weeks)

• 4) You cannot usually terminate a contract during the minimum contract period

• 5) You terminate the contract after the minimum contract period by giving (usually) 2 or 4 weeks written notice

• 6) Some estate agents charge a withdrawal fee or termination fee (Check the contract to see.)

• 7) Some (many) estate agents charge their full fee, if they feel they've introduced a 'ready, willing and able buyer', and then the seller withdraws. But some charge a reduced fee, and some charge no fee. (Check the contract to see.)

Is that how your contract was structured? If so, did you terminate the contract by giving written notice? Did you get a written response from the estate agent?

And...

• Are you worried about the estate agent charging you a withdrawal / termination fee - as mentioned in 6 above? (If so, what did their contract say about withdrawal / termination fees?)

• Or are you worried about the estate agent charging the full fee for introducing a 'ready, willing and able buyer' as mentioned in 7 above? (If so, what did their contract say about fees for introducing a 'ready, willing and able buyer'?)

Pendsive

Thanks for these points Edddy and I hope this makes things more clear.

The contract states under the withdrawal charges: That if the contract is cancelled within the time limit stated the client will pay the administration costs of the contract and also if a sale has been agreed with a ready, willing and able buyer the agency has the right to take the fee that would’ve been payable on the unconditional exchange of contracts and it also states that for the property to stop being marketed that the administration fee needs to be paid.

On these points I asked for the contract to be cancelled while the contract was still running and it had about four weeks to go and as stated above their accounts department never got back to me on this. Also despite a price being agreed with a potential buyer nothing more was done, there was no mention of exchange of contracts or surveyors or for me to get cracking with my solicitor.

At this stage, contact between myself and the agent was all done by email where I requested that due to my circumstances the house needs to be withdrawn from the market and the person I spoke to said that this was fully understandable and that they would pass on the info to their accounts department to be processed and that they would get in touch with me was the last I ever heard from them.

Looking at the contract, it actually states that the administration fee needs to be paid for them to stop marketing the house and as this never happened does this mean that the house is still being technically marketed but as its not physically could they have just put everything on hold and then forgot about it.

Of more concern is that the contract states that they reserve the right to charge interest on any unpaid invoice at a base rate of 6% per annum above the lending rate. So does this mean that they can charge 6% per year on any unpaid fees, despite the fact that I never ever received an invoice from them?

According to the contract there are two fees that could be paid the administration fee and the possible ready, willing and able buyer fee. I’m far more concerned about the second fee as its more than three times the amount of the administration fee.

Also can the agent legally do any of this if I have never received an invoice from them either by post or email?

And also as Sajaan mentioned could the contract still be active but with no active marketing and if I approach them again will it just become active and we will continue where we left off?   

eddddy

It's very difficult to understand what you're saying.

Is this the exact wording of the contract:

That if the contract is cancelled within the time limit stated the client will pay the administration costs of the contract and also if a sale has been agreed with a ready, willing and able buyer the agency has the right to take the fee that would’ve been payable on the unconditional exchange of contracts and it also states that for the property to stop being marketed that the administration fee needs to be paid.

If it's not, can you quote the exact wording in the contract that relates to cancellation and withdrawal?

And/or what is the "time limit stated"? Again, can you quote the precise wording as it appears in the contract?

Pendsive

This is the wording from the withdrawal section:

If the marketing agreement is terminated by the client at any time within the initial 16 week marketing period, the agent is entitled to receive an administration fee of £400 to cover the cost incurred by the agent.

If the property is withdrawn from the market after the initial 16 week marketing period and the full 30 days written notice has been provided to the agent, there will be no administration fee for withdrawing the property from the market.

If a sale is agreed with a ready, willing and able buyer, the agency reserves the right to charge the full fixed fee that would have been payable upon the unconditional exchange of contracts.

The administration fee must be paid before the agent will cease marketing the property

There is also a separate ready, willing and able section as well:

A purchaser is ready, willing and able if they are prepared and able to exchange unconditional exchange of contracts of the purpose of the purchase of your property at the agreed price. They are considered able if the agency is in receipt of proof of funding for the purchase.

You will be liable to pay the agency fee to the agent in addition to any other costs or charges agreed if such a purchaser is introduced by the agent in accordance with your instructions and this must be paid even if you subsequently withdraw from the sale and unconditional contracts for sale are not exchanged, or you decide not to proceed with the full asking price offer from a proceedable purchaser, irrespective of your reasons

What I don't understand is if there were liabilities on my part, along with me notifying them by email to cancel the marketing of the property, why didn't the agent invoice me back in 2021?

eddddy

As an aside, the estate agent uses the word "terminated", you use the word "cancelled". "Cancelled" tends to mean something different in estate agents contracts. So I'm going to stick with the word "terminated".


So the estate agent says:

If the marketing agreement is terminated by the client at any time within the initial 16 week marketing period...

So assuming you have email records that clearly show that you terminated the agreement 3.5 years ago, you are free to instruct another estate agent if you want. (Or instruct the same estate agent again, if you prefer.)

The estate agent is free to charge you the £400 fee for up to 6 years from when the the charge was incurred. So I guess that's for another 2.5 years.

But if they haven't invoiced you by now, I suspect they won't.

Pendsive said:

A purchaser is ready, willing and able if they are prepared and able to exchange unconditional exchange of contracts of the purpose of the purchase of your property at the agreed price. They are considered able if the agency is in receipt of proof of funding for the purchase.

Again, the estate agent is free to charge you this fee for up to 6 years from when the charge was incurred - so another 2.5 years to go.

And if they do, perhaps you would argue whether your buyer really was "ready willing and able".

But again, if they haven't invoiced you by now, I suspect they won't.

Pendsive

Ah yes the word is "terminated" and not "Cancelled"

I'm now trying to work out whether I should go back to the same estate agent or not. If they give me an invoice I imagine it will be for the original cost rather than with any interest added, because from my understanding interest would only occur if they had invoiced me before and I had not paid or contested it? Also I have kept records of all correspondence with the agent as well showing when contact ended.

based on what was written above, can a ready, willing and able buyer occur more than once? For example if they insist that there was one before and I sell with them again, can the same thing potentially happen again?  

Also as the administration fee was never made for terminating the original agreement, does this mean that the same contract I have could become active again?

eddddy

Pendsive said:

Also as the administration fee was never made for terminating the original agreement, does this mean that the same contract I have could become active again?

If both parties agreed that the agreement was terminated - then it will remain terminated.

Both parties can now agree to enter into a new agreement, if they want to.  The new agreement could be on the same terms as the old agreement (if that's what both parties agree).

Or the new agreement could be on different terms (if that's what both parties agree).

Pendsive said:

based on what was written above, can a ready, willing and able buyer occur more than once? 

If you and the estate agent agree to enter into a new agreement, then the terms of the new agreement will apply.

If the new agreement includes a "Ready, Willing and Able Buyer" clause - then that will apply.

(And as mentioned, the estate agent has up to 6 years to collect fees due from the previous agreement.)


But if you want, you can say to the estate agent that you will only enter into a new agreement with them on condition that they agree not to charge you any fees relating to the old agreement.

(But talking about fees relating to the old agreement might be 'opening a can of worms. Maybe it's better not to mention the possibility that you might owe fees from the previous agreement.)

StarkCouzens

Sorry to hear about your loss.

I think Eddddy has covered everything you need to know.

Look for an agent, if you think they were the best one, they will not charge you a cancellation fee if your going with them again.

Even if you weren't going with them, if they took you to court the judge would probably be in your favour due to mitigating circumstances.

Was it within the 2 weeks that you cancelled? whether there is a cooling off period mentioned or not, there is one by law, not putting it in doesn't mean it doesn't exist.

the agent doesnt want to get a bad reputation, and maybe they are not going to charge you on the hope that you come back to them, they will still have photos etc and all the details, so for them its quite a nice new listing.

Good luck