Sole Agency Agreement Clause

20122013

My termination notice has been accepted, I would like to understand what this clause in the Agency's TCs  means:

' If unconditional contracts for the sale of the Property are exchanged after the expiry of the Period during which  the <AGENT NAME>  is in force but to a Buyer who was introduced to the Seller, the Property or the purchase during the Period or with whom <AGENT NAME> had  negotiations about the Property during that Period. However, the Seller will not be liable to pay the Comission Fee in any of these circumstances if the sale is agreed more than 6 months after the expiry of the Period during which the <AGENT NAME> is in force and where the Seller had appointed another Estate Agent whose activities have resulted in the sale of the Property, or 24 months after the expiry of the <AGENT NAME> in all other cirucmstances.'

I would like to know when will I be liable to pay a fee? is there anything I can do to minimise this?

curtis122

They don't make it easy do they and I'm sure its done on purpose. Thats a lot of words that could have been put a lot more simply. It reads like they have a 6 month hold after the expiry where they still have come back if you sell your house in that time. To me (after reading it a number of times!) its 24 months if you were to sell it on your own or another way without an estate agent?? 

eddddy

That's more or less a standard clause in estate agency contracts.

It would apply to this kind of situation...

• You instruct estate agency A  to sell your property
• 'Alex Smith' is introduced to your property - e.g. estate agent A arranges a viewing of your property for Alex Smith
• Alex Smith might seem disinterested (or they make a low offer which you reject)
• After a while, you get fed up with estate agency A, and you terminate their contract

And then option 1 happens....

• You instruct estate agent B
• Then Alex Smith comes back within 6 months and makes an offer through estate agent B, which you accept
• Since Alex Smith was introduced to your property during estate agency A's contract period, you have to pay them their fee

Or option 2 happens....

• You don't instruct another estate agent
• Then Alex Smith comes back within 24 months and makes an offer directly to you, which you accept
• Since Alex Smith was introduced to your property during estate agency A's contract period, you have to pay them their fee

The way to avoid paying 2 fees with option 1 is to say to estate agent B (before you sign their contract)...

"Here is a list of people that estate agent A introduced (including Alex Smith). If any of these people enquire about my property, you must send them back to estate agent A.

I won't pay you any commission in relation to anyone on this list."

eddddy

curtis122 said:

It reads like they have a 6 month hold after the expiry where they still have come back if you sell your house in that time.

Only if you sell it to somebody who was introduced during the estate agent's contract period.

You are free to sell the house to anyone else, without paying the estate agent a fee.

As I say, it's a standard clause - it's very similar to the wording used in UK legislation (but the legislation doesn't impose 6 month or 24 month time limits)...

Sole agency

“SOLE AGENCY

You will be liable to pay remuneration to us, in addition to any other costs or charges agreed, if at any time [unconditional contracts for the sale of the property are exchanged]—

• with a purchaser introduced by us during the period of our sole agency or with whom we had negotiations about the property during that period; or

• with a purchaser introduced by another agent during that period.”

Link: https://www.legislation.gov.uk/uksi/1991/859/made

eddddy

20122013 said:

' If unconditional contracts for the sale of the Property are exchanged after the expiry of the Period during which  the <AGENT NAME>  is in force but to a Buyer who was introduced to the Seller, the Property or the purchase during the Period or with whom <AGENT NAME> had  negotiations about the Property during that Period. However, the Seller will not be liable to pay the Comission Fee in any of these circumstances if the sale is agreed more than 6 months after the expiry of the Period during which the <AGENT NAME> is in force and where the Seller had appointed another Estate Agent whose activities have resulted in the sale of the Property, or 24 months after the expiry of the <AGENT NAME> in all other cirucmstances.'

Reading this again, the title of your thread says "Sole Agency Agreement", but this wording is more like a "Sole Selling rights agreement".

And have you accidentally deleted the word "agreement" or "contract" in a couple of places:




Should "Period during which  the <AGENT NAME>  is in force" be

• "Period during which  the <AGENT NAME>'s agreement  is in force"
  

or 

• "Period during which  the <AGENT NAME>'s contract  is in force"

(Otherwise the wording doesn't make sense.)

20122013

eddddy said:

20122013 said:

' If unconditional contracts for the sale of the Property are exchanged after the expiry of the Period during which  the <AGENT NAME>  is in force but to a Buyer who was introduced to the Seller, the Property or the purchase during the Period or with whom <AGENT NAME> had  negotiations about the Property during that Period. However, the Seller will not be liable to pay the Comission Fee in any of these circumstances if the sale is agreed more than 6 months after the expiry of the Period during which the <AGENT NAME> is in force and where the Seller had appointed another Estate Agent whose activities have resulted in the sale of the Property, or 24 months after the expiry of the <AGENT NAME> in all other cirucmstances.'

Reading this again, the title of your thread says "Sole Agency Agreement", but this wording is more like a "Sole Selling rights agreement".

And have you accidentally deleted the word "agreement" or "contract" in a couple of places:




Should "Period during which  the <AGENT NAME>  is in force" be

• "Period during which  the <AGENT NAME>'s agreement  is in force"
  

or 

• "Period during which  the <AGENT NAME>'s contract  is in force"

(Otherwise the wording doesn't make sense.)

appreciate the replies, I hope it will be clearer if an image of the whole all of 'clause 2' is attached.  As I have only posted the final part of  clause 2  in my OP.  (The agent name contains 2 words which had been crossed off, but occassionally it ends with 'Agency' - which I have not crossed off) Sorry the image is faint. 

eddddy

OK - so they're using the word "Agency" to mean "Contract Period". That's fine.

That image confirms what I said about the 6 month and 24 month liability to pay fees in previous posts. (Which is fairly standard in Estate Agent's contracts.)




But they are breaking other rules. They've titled it a "Sole Agency Agreement" but the wording is a "Sole Selling Rights Agreement"

But maybe you're not bothered.

A Sole Agency Agreement should say

• "... even if the buyer was not found by <xxxxx> but by any other agent"

whereas a Sole Selling Rights Agreement would say

• "... even if the buyer was not found by <xxxxx> but by any other agent or by any other person including the Sellers"

(And similarly in the next paragraph).


But that only makes a difference if you find somebody to sell to privately, not through the estate agent. e.g. you sell to a friend of a friend, or a work colleague - who has never spoken to the estate agent.

But maybe that's so unlikely that you're not bothered.

20122013

eddddy said:

OK - so they're using the word "Agency" to mean "Contract Period". That's fine.

That image confirms what I said about the 6 month and 24 month liability to pay fees in previous posts. (Which is fairly standard in Estate Agent's contracts.)




But they are breaking other rules. They've titled it a "Sole Agency Agreement" but the wording is a "Sole Selling Rights Agreement"

But maybe you're not bothered.

A Sole Agency Agreement should say

• "... even if the buyer was not found by <xxxxx> but by any other agent"

whereas a Sole Selling Rights Agreement would say

• "... even if the buyer was not found by <xxxxx> but by any other agent or by any other person including the Sellers"

(And similarly in the next paragraph).


But that only makes a difference if you find somebody to sell to privately, not through the estate agent. e.g. you sell to a friend of a friend, or a work colleague - who has never spoken to the estate agent.

But maybe that's so unlikely that you're not bothered.

Appreicate this!  I am bothered about this.

so if I sell it through another agent I am not liable to pay this agent any fee) but if I find  a buyer myself within the next 12 months then I have to pay them a fee ..

What can I do to clarify this? Since I have signed the Contract with this agent,  the manager has not contacted me as requested, their Head office referred me back to the manager. I wonder what  I need to write to confirm your helpful points ? as they have had some viewers who are 'thinking' of making an offer. In my mind, I will email and instruct them not more viewings and I will be collecting hte keys and our contract terminates immediately and ask my questions and also  postpone the valuations with other agents for now.

PS: I was about to email some people I know to see whether they would be interested to buy - so I guess I had better not do that..

eddddy

20122013 said:

I wonder what  I need to write to confirm your helpful points ? as they have some viewers who is 'thinking' of making an offer. In my mind, I will email to not more viewing and contract terminates immediately and then ask my questions and postpone the valuations with other agents for now.

Why is this a problem?
Why don't you want people to make offers?
Why don't you want any more viewings?

If you want to sell your property, you want people to view and you want people to make offers.

And why do you want to terminate the contract? It sounds like they are getting a lot of interest.


And you cannot normally terminate a contract immediately. You usually have to give 2 or 4 weeks written notice.
(And the minimum contract period has to have ended.)

20122013 said:.

PS: I was about to email some people I know to see whether they would be interested to buy - so I guess I had better not do that..

Do you want to deal with those people directly yourself?
Or do you want the estate agent to deal with them?

If you want to deal with them directly, maybe wait until the contract with the estate agent has ended before you contact them.

saajan_12

20122013 said:

eddddy said:

OK - so they're using the word "Agency" to mean "Contract Period". That's fine.

That image confirms what I said about the 6 month and 24 month liability to pay fees in previous posts. (Which is fairly standard in Estate Agent's contracts.)




But they are breaking other rules. They've titled it a "Sole Agency Agreement" but the wording is a "Sole Selling Rights Agreement"

But maybe you're not bothered.

A Sole Agency Agreement should say

• "... even if the buyer was not found by <xxxxx> but by any other agent"

whereas a Sole Selling Rights Agreement would say

• "... even if the buyer was not found by <xxxxx> but by any other agent or by any other person including the Sellers"

(And similarly in the next paragraph).


But that only makes a difference if you find somebody to sell to privately, not through the estate agent. e.g. you sell to a friend of a friend, or a work colleague - who has never spoken to the estate agent.

But maybe that's so unlikely that you're not bothered.

Appreicate this!  I am bothered about this.

so if I sell it through another agent I am not liable to pay this agent any fee) but if I find  a buyer myself within the next 12 months then I have to pay them a fee ..

What can I do to clarify this? Since I have signed the Contract with this agent,  the manager has not contacted me as requested, their Head office referred me back to the manager. I wonder what  I need to write to confirm your helpful points ? as they have had some viewers who are 'thinking' of making an offer. In my mind, I will email and instruct them not more viewings and I will be collecting hte keys and our contract terminates immediately and ask my questions and also  postpone the valuations with other agents for now.

PS: I was about to email some people I know to see whether they would be interested to buy - so I guess I had better not do that..

Basically you have a sole selling rights contract, so if you discuss with a potential buyer during the contract, you will have a long wait (6m / 12m) before you can sell to them without paying this agent. Your options are 
1) sell anyway, factoring the fee in
2) try to negotiate with the agent to amend the contract to being multi agency or actually sole agency (ie a buyer you find yourself at any point is exempt from a fee). The leverage would be because you would give notice otherwise. 
3) give notice to end the contract. Wait out any min term or notice period and then engage with new buyers. 

curtis122

So if the seller decided to ditch EA A and went to EA B how would they know who's been put forward by them to avoid them and avoid paying a fee. Can you go back to EA A and ask them to provide a list?