EA Contract help with understanding clauses

RocketRonnieRadox

Hi All, 

we are in the process of changing estate agents for our own reasons.

the previous agent got us say 10 viewings / introductions during their term. 

we selected a new EA and they sent the contract over and I am confused by the wording mainly in the section about sole agency. I’d really appreciate some help understanding these clauses as I need to understand who’s fees we would have to pay also in terms of the introductions made by the previous agent / any future agent and the newly selected agent.

here is the section in the contract 
“ 2. Sole Agency

• 2.1. The Agent will be the only agent for the sale of the Property during the Agency Period (the Sole Agency).
• 2.2. The Seller will be liable to pay the Completion Fee to the Agent, in addition to any other costs or charges agreed, if at any time, unconditional contracts for the sale of the Property are exchanged:-

2.2.1 with a buyer introduced by the Agent during the period of the Agent's Sole Agency; or

2.2.2. with a buyer introduced by another agent during that period.

However, the Seller will not be liable to pay the Completion Fee in any of these circumstances:-

 if the unconditional contracts for the sale of the Property are exchanged six months after the expiry of the period of Sole Agency and where the Seller has appointed another estate agent whose activities have resulted in the sale of the Property, or twelve months after the expiry of the period of Sole Agency in all other circumstances. ?????

2.3 On expiry of the Agency Period, unless ter minated by either side by a minimum of 14 days written notice expiring on the last day of the Agency Period, the agency shall continue as the Sole Agency until either: -

• 2.3.1. It is terminated by either the Seller or the Agent on 28 days written notice; or
• 2.3.2. The Seller by 28 days written notice to be served not earlier than the last day of the Agency Period converts the Sole Agency into a Muitiple Agency, which Multiple Agency shall then continue on the terms set out in clause 5 of the Agency Agreement and in clause 3 below; or
• 2.3.3. the Seller appoints another agent without giving any or any adequate notice, in which case the Sole Agency will continue to apply save that the Multiple Agency Completion Fee will be payable if a fee becomes due.”

Am I correct in thinking that under these terms I would have to pay the new agent the fees if 

a) a person introduced y the previous agent completed
b) The house sold by a later agent within 6 months of the end of this agreement
c) confused about the last sentence of clause 2.2.2 - or 12 months after the expiry of the period of sole agency in all other circumstances???

The whole clause 2 is very ambiguous and I would appreciate any help interpreting them.

thank you ! 

eddddy

RocketRonnieRadox said:

Am I correct in thinking that under these terms I would have to pay the new agent the fees if 

a) a person introduced y the previous agent completed

No - you should only pay the previous agent fees in that case. Not the new agent. (Subject to 6 or 12 month time limits. See below.)


To make sure this happens....

• When you terminate your contract with the previous agent, ask for a list of people that they have introduced. (Probably just the 10 people who viewed.)

• Before signing the contract with the new agent, make sure they agree that they will not charge you a fee if anyone on that list goes on to buy. (If they are approached by anyone on the list, they must refer them back to the previous agent.)

Most agents are members of The Property Ombudsman Scheme, and the above is mandatory for members - so it should happen automatically. But it's best to make it clear in your discussions.

RocketRonnieRadox said:

2.2.2. with a buyer introduced by another agent during that period.

However, the Seller will not be liable to pay the Completion Fee in any of these circumstances:-

 if the unconditional contracts for the sale of the Property are exchanged six months after the expiry of the period of Sole Agency and where the Seller has appointed another estate agent whose activities have resulted in the sale of the Property, or twelve months after the expiry of the period of Sole Agency in all other circumstances. ?????

The list/process I mentioned above is valid for 6 months, if you hire a new estate agent. i.e. The new estate agent can start dealing with people on the list after 6 months.

i.e. The previous estate agent no longer gets a fee for somebody they introduced, once 6 months is up. (The new estate agent can get the fee.)


But if you sell privately (without using an estate agent) to somebody the previous estate agent introduced, within 12 months - the previous estate agent gets their fee. But if more than 12 months has passed, the previous estate agent gets no fee.

RocketRonnieRadox

@eddddy Thank you for the explanation. The way it read to me made it look like the new agent gets paid the fee if the old agents introduction completes.

noted on the list of people the old agents introduced.
I did ask them for that list and they said that they would issue it at the end of the notice period and not before. I guess that’s a kind of punishment to delay me.

What about in the case if I decide at some later date that I want to change agent again ? According to the clauses would I have to pay their fees if I sold to someone a later agent introduced if it was within 6 months of leaving the second appointed agent ?

also worth noting is section 1 that I just read and gives cause for similar concern

1. Entitlement to Completion Fee

• 1.1. A Completion Fee is payable when you are not making a prepayment in full. The Completion Fee, if applicable, is the amount set out in the Agency Agreement. The Completion Fee is payable under the circumstances set out in clause 1.2 and/or clause 1.3 below.
• 1.2. The Completion Fee will be payable whether the introduction is a direct introduction or an indirect introduction (where the Buyer makes the purchase as a result of becoming aware that the Property was for sale through the marketing of the Property by the Agent) and whether or not the Buyer makes the offer to purchase through another Agent. Another Agent is someone involved in estate agency work or someone who, n the course of business, introduces a Buyer to the Property but has no further involvement.
• 1.3. The Agent's contractual responsibility is confined to marketing the property and the other obligations set out in this Agreement, and any further assistance in relation to the purchase is entirely at the Agent's discretion.
• 1.4. The Completion Fee does NOT include the Prepayment Fee.

Clause 1.2 also mentions “another agent” 

surely they have no claim unless they introduced the buyer in any circumstances? To me it seems like they want the fee if ANY buyer bought within 6 months of leaving them.



thanks again ! 

eddddy

RocketRonnieRadox said:

What about in the case if I decide at some later date that I want to change agent again ? According to the clauses would I have to pay their fees if I sold to someone a later agent introduced if it was within 6 months of leaving the second appointed agent ?

In simple terms, you pay whichever agent introduced the buyer (subject to the 6 month / 12 month time limit).


So let's say...

• You initially went with agent 1
• You switch to agent 2
• After another 6 weeks you switch to agent 3

Then you sell to Mr Green.

• If agent 1 originally introduced Mr Green - you pay agent 1 and no other agent
• If agent 2 originally introduced Mr Green - you pay agent 2 and no other agent
• If agent 3 originally introduced Mr Green - you pay agent 3 and no other agent

- So you get a list when you leave agent 1 - and you pass that list to agent 2
- So you get another list when you leave agent 2 - and you pass both lists to agent 3

That's how the Property Ombudsman expects estate agents to work.

But I've come across a few 'rogue' estate agents who say they won't work like that - so I go elsewhere.

So it's best to make sure that you and the estate agents fully agree with this before you sign their contract - i.e. make the terms clear in an email before you sign their contract.