Estate Agents clauses

20122013

I am looking to instruct this EA as a sole agency and whether these are standard terms?

1.

'Contract
If any part of this contract is held unenforceable or invalid the remaining parts of this contract shall be enforceable and valid. This agreement shall be subject to the laws of England & Wales.'

I think this is acceptable or maybe I am missing something?

2.

'A purchaser we have introduced is anyone who has been informed of your property through our activity either directly or through another person (for example - wife, husband, family member, partner or business partner) including anyone acting on behalf of the purchaser. This may include (for example) advertisements, sales details, for sale boards, electronic advertising including internet media, leaflets and any verbal or written information given about the property. It is possible for us to be the introducer whilst there is another agent instructed or you use a website/portal other than our own.'

I am unsure of the bold text. as usually it says the buyer / viewers but not seen the bold texts mentioned. 

DullGreyGuy

1 - you will see this in virtually any contract professionally written

2 - The bold bit I dont think is particularly of concern, it makes sense that if they have shown the wife round that the husband can't approach you to try and cut the agent out for a mutual saving. The none bold bit is more of a concern given how broad it is if you in the future decide you want to instruct another agency. 

20122013

DullGreyGuy said:

2 - The bold bit I dont think is particularly of concern, it makes sense that if they have shown the wife round that the husband can't approach you to try and cut the agent out for a mutual saving. The none bold bit is more of a concern given how broad it is if you in the future decide you want to instruct another agency. 

Good point - I was thinking of instructing this agent first, as they have a shorter tie in but if their 'Introduction clause' is this restricted than I will instruct the other agent whom seems to be more flexible (?)  I was trying to think of a way to negotiate this clause but  this is their bread and butter.  I am re-reading the whole agreement, again, the next part (following on from '2 'A purchaser we have introduced') which reads:

'In accordance with The Property Ombudsman’s Code of Practice (TPO), following termination of our agreement, if a purchaser introduced by us or with whom we have negotiated with goes on to buy your property through another agency (and even if you have paid that other agent a selling fee), we will still be entitled to our fee if a Memorandum of Sale (or equivalent) is issued by the other agent within 6 (six) months of date of  termination of our instruction (at the end of the 28 (twenty eight) days notice) and where exchange of contracts takes place. In all other cases, we Will still be entitled to our fee for an exchange of contracts occurring up to 2  (two) calendar years from termination (at the end of the 28 twenty eight) days‘ notice) of
our agreement.' 

This seems like a sole selling right contract  (ie i cannot sell privately)? Despite I was told this is a sole agency contract.. Does that mean their fee is due if I had sold it to someone privately, I am sure I have miss out other points. 

eddddy

20122013 said:

2.

'A purchaser we have introduced is anyone who has been informed of your property through our activity either directly or through another person (for example - wife, husband, family member, partner or business partner) including anyone acting on behalf of the purchaser. This may include (for example) advertisements, sales details, for sale boards, electronic advertising including internet media, leaflets and any verbal or written information given about the property. It is possible for us to be the introducer whilst there is another agent instructed or you use a website/portal other than our own.'

I am unsure of the bold text. as usually it says the buyer / viewers but not seen the bold texts mentioned. 

Is the estate agent a member of the Property Ombudsman Scheme (most are)?

If so, this clause doesn't comply with the Ombudsman's mandatory code of practice. (i.e. the bit about sale boards, adverts, leaflets etc)

In your position, I would clarify by email with the agent that will only agree to the Property Ombudsman's definition of 'an effective introduction'.


(And the Property Ombudsman requires the agent to give you a list of people they've introduced when you terminate the contract. Obviously, they cannot list all the people who have seen a for sale board, or seen an internet advert.)


Here are some relevant extracts for the Property Ombudsman's code of practice:

18j Effective Introduction. An effective introduction must evidence that the agent carried out an act that initiated the buyer’s reaction to the property. As such, there is a need for a defined transaction event to occur. This can be most clearly evidenced by an agent carrying out a viewing.

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

20122013

@ eddddy

Yes, they are part of the Property Ombudsman Scheme.

May I check is this a Sole Selling Right contract (I have posted above):

'In accordance with The Property Ombudsman’s Code of Practice (TPO), following termination of our agreement, if a purchaser introduced by us or with whom we have negotiated with goes on to buy your property through another agency (and even if you have paid that other agent a selling fee), we will still be entitled to our fee if a Memorandum of Sale (or equivalent) is issued by the other agent within 6 (six) months of date of  termination of our instruction (at the end of the 28 (twenty eight) days notice) and where exchange of contracts takes place. In all other cases, we Will still be entitled to our fee for an exchange of contracts occurring up to 2  (two) calendar years from termination (at the end of the 28 twenty eight) days‘ notice) of
our agreement.'  

I might be getting muddled.. when I move on to a new agent,  almost all ex agents will be due their fee if they have 'made the introduction' and my current agent has sold it to my ex agents viewer? , so maybe this clause is not a sole selling rights ?

eddddy

20122013 said:

@ eddddy

Yes, they are part of the Property Ombudsman Scheme.

May I check is this a Sole Selling Right contract (I have posted above):

'In accordance with The Property Ombudsman’s Code of Practice (TPO), following termination of our agreement, if a purchaser introduced by us or with whom we have negotiated with goes on to buy your property through another agency (and even if you have paid that other agent a selling fee), we will still be entitled to our fee if a Memorandum of Sale (or equivalent) is issued by the other agent within 6 (six) months of date of  termination of our instruction (at the end of the 28 (twenty eight) days notice) and where exchange of contracts takes place. In all other cases, we Will still be entitled to our fee for an exchange of contracts occurring up to 2  (two) calendar years from termination (at the end of the 28 twenty eight) days‘ notice) of
our agreement.'  

What you've posted above is part of a 'Sole Agency Agreement' - it's not part of a 'Sole Selling Rights' agreement.

It's part of a 'Sole Agency Agreement' because it says:

• "...if a purchaser introduced by us or with whom we have negotiated with goes on to buy your property..."

If it were part of a "Sole Selling Selling Rights Agreement" it would say something like:

• ...if a purchaser introduced in the period during which we have sole selling rights goes on to buy your property, even if the purchaser was not found by us but by another agent or by any other person, including yourself....

DullGreyGuy

20122013 said:

DullGreyGuy said:

2 - The bold bit I dont think is particularly of concern, it makes sense that if they have shown the wife round that the husband can't approach you to try and cut the agent out for a mutual saving. The none bold bit is more of a concern given how broad it is if you in the future decide you want to instruct another agency. 

Good point - I was thinking of instructing this agent first, as they have a shorter tie in but if their 'Introduction clause' is this restricted than I will instruct the other agent whom seems to be more flexible (?)  I was trying to think of a way to negotiate this clause but  this is their bread and butter.  I am re-reading the whole agreement, again, the next part (following on from '2 'A purchaser we have introduced') which reads:

'In accordance with The Property Ombudsman’s Code of Practice (TPO), following termination of our agreement, if a purchaser introduced by us or with whom we have negotiated with goes on to buy your property through another agency (and even if you have paid that other agent a selling fee), we will still be entitled to our fee if a Memorandum of Sale (or equivalent) is issued by the other agent within 6 (six) months of date of  termination of our instruction (at the end of the 28 (twenty eight) days notice) and where exchange of contracts takes place. In all other cases, we Will still be entitled to our fee for an exchange of contracts occurring up to 2  (two) calendar years from termination (at the end of the 28 twenty eight) days‘ notice) of
our agreement.' 

This seems like a sole selling right contract  (ie i cannot sell privately)? Despite I was told this is a sole agency contract.. Does that mean their fee is due if I had sold it to someone privately, I am sure I have miss out other points. 

The problem with the TPO is that they dont have clear rules, as per the quote above it states that its most clearly evidenced with a viewing however "most clearly" leaves the door open to other options, maybe to cover those who buy without viewing, but it doesnt give certainty.

I always find it hard to read contracts piecemeal and there are presumably more than just two clauses to the contract. The later part isnt well written and its not 100% clear if its just referring to an introduced purchaser or not... in context I would say it is but then if it was me Id have the wording changed to make it clearer

eddddy

DullGreyGuy said:

The problem with the TPO is that they dont have clear rules, as per the quote above it states that its most clearly evidenced with a viewing however "most clearly" leaves the door open to other options, maybe to cover those who buy without viewing, but it doesnt give certainty.

If the estate agent puts people on the list who you don't believe they have really introduced...

- complain to the estate agent
- then complain to the property ombudsman



If the estate agent has done something dodgy, I suspect they will back down - rather than face an investigation.

If an investigation goes ahead, the agent might have to pay an investigation fee of £414 to the ombudsman. (I'm not sure if the agent gets a free allowance before fees kick-in.) Plus spend time working with the ombudsman.

DullGreyGuy

eddddy said:
 (I'm not sure if the agent gets a free allowance before fees kick-in.) Plus spend time working with the ombudsman.

They get 3 free per year, assume its per branch given how its presented in the table and that also shows the branch level membership fee 

RHemmings

As well as the TPO's definitions of (e.g.) 'effective introductions', there are also case studies that help make those definitions clearer. 

E.g. https://www.tpos.co.uk/news-media-and-press-releases/case-studies/item/dual-fee-deception-or-dilemma

This one is old, but still up on TPOS's website. The decision was that there was no effective introduction, even though the agent accompanied the eventual buyer on a viewing. https://www.tpos.co.uk/news-media-and-press-releases/case-studies/item/commission-fees-the-introduction-to-the-purchase 

Note that even when it is decided that the first agent was due their fee, in the case studies I see it was decided that the second agent (who actually sold the property) weren't due a fee. I've seen several cases like that. I presume that only applies when both agents are members of TPOS. E.g. see here: https://www.tpos.co.uk/news-media-and-press-releases/case-studies/item/dual-fee-dispute  TL;DR: agents need to do due diligence to avoid dual fee situations, and if they don't then TPOS may decide that the fee should go to the first agent. And, nothing to the second. 

20122013

DullGreyGuy said:

..I always find it hard to read contracts piecemeal and there are presumably more than just two clauses to the contract. The later part isnt well written and its not 100% clear if its just referring to an introduced purchaser or not... in context I would say it is but then if it was me Id have the wording changed to make it clearer

Is is still legally binding if the agent and I have a written agreement in an email (as they cannot amend the terms in their agreement)?