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1st estate agent wants fees

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Lootman
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Re: 1st estate agent wants fees

#404283

Postby Lootman » April 14th, 2021, 6:44 pm

murraypaul wrote:I think the discussion is getting side tracked into what people think is fair, which has nothing to do with the question.
If:
a) The first agent's contract said that they would paid commission if they introduced someone who later bought the house within X time period
b) The contract said that that entitlement would continue if the customer cancelled their agency
c) They introduced a buyer
d) That buyer bought the house within X time period
Then they are entitled to their commission.

It doesn't matter whether a second agent was hired or the house was sold privately, it doesn't matter what the second agent's contract says, it doesn't matter what seems fair or not. If the scenario above matches what happened, then the agent did what the contract said they needed to do to earn a commission, so they have earned it.

Actually concepts like "fairness", "reasonableness" and "good faith" do determine how such disputes are resolved in practice. People like to think that the technicalities of small print determine the outcome 100% but that is often not how things work out in the real world.

I have probably written over 100 contracts, most of which were residential leases. They were of course carefully crafted and worded to favour myself almost exclusively. But that did not mean that I could enforce every clause and stipulation just like that. Contract clauses can be voided for a variety of reasons. Judgements are made on the basis of what a reasonable person would agree to, including concepts like fairness and public interest. I never said the contract is irrelevant. Only that it is just one of several factors that go into a resolution. A contract is not a suicide pact.

Moreover I have absolutely released myself from other peoples' contracts by claiming that the clause or contract was not reasonable. Just because you sign something does not necessarily entail that you are screwed. it all depends. So then how are such things typically resolved?

I had a number of contract disputes over the years, and not a single one went to trial. What that means is that they were resolved much more informally, either by negotiation, mediation or arbitration. Indeed, one or more of those processes is often required by the courts before proceeding to trial. At those meetings a court official is there making it very clear to the parties that it is expected that a compromise will be agreed. In fact if a party refuses such a facilitated process that can count against them at trial. In each dispute I got some of what I asked for, but never all. We compromised.

So in practice a dispute like this will be resolved by the parties sitting in a room figuring out the best outcome for all concerned. So sure, read the contracts, read the law, but do not lose sight that this is also about real people, how they behave, what their motives were and what is reasonable and fair.

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Re: 1st estate agent wants fees

#404315

Postby murraypaul » April 14th, 2021, 8:48 pm

Lootman wrote:So in practice a dispute like this will be resolved by the parties sitting in a room figuring out the best outcome for all concerned. So sure, read the contracts, read the law, but do not lose sight that this is also about real people, how they behave, what their motives were and what is reasonable and fair.


Well I'm pretty sure we know how this is being resolved, as they have called in debt collectors:
As the buyer was originally introduced to the property by Springbox, they have now contacted a debt collector and are asking for their fees.

They don't seem that interested in sitting around in a room.

And again, If I'm Springbox and the contract was as hypothesized above, I think it is perfectly reasonable and fair that I be paid for introducing the person who ended up buying the house.

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Re: 1st estate agent wants fees

#404320

Postby Lootman » April 14th, 2021, 8:57 pm

murraypaul wrote:
Lootman wrote:So in practice a dispute like this will be resolved by the parties sitting in a room figuring out the best outcome for all concerned. So sure, read the contracts, read the law, but do not lose sight that this is also about real people, how they behave, what their motives were and what is reasonable and fair.

Well I'm pretty sure we know how this is being resolved, as they have called in debt collectors:

Since there is no court judgement there is not much any debt collector can do. No bailiffs, no charge against assets, no garnishment of wages, no liens, nothing.

What has presumably happened here is that the agency has sold the "debt" (really just a claim) at a discount, and the debt collectors are hoping they can recoup more than they paid for the "debt". Whether that will actually happen depends on the tenacity of the "debtor". Without a court judgement there isn't much the collectors can do other than harass and try and intimidate the OP. Might work, but it would work not with me.

Even with court judgements, debtors have been known to escape payment or settled for a percentage. I've seen off a few myself in my time and I was more guilty than this OP.

murraypaul wrote:I think it is perfectly reasonable and fair that I be paid for introducing the person who ended up buying the house.

Sure, I already said they deserve some kind of finders fee. The issue is how much and who pays it?

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Re: 1st estate agent wants fees

#404322

Postby murraypaul » April 14th, 2021, 9:02 pm

Lootman wrote:
murraypaul wrote:I think it is perfectly reasonable and fair that I be paid for introducing the person who ended up buying the house.

Sure, I already said they deserve some kind of finders fee. The issue is how much and who pays it?


And I'm sure you won't be surprised that my answers are:
a) What is specified in the contract, and
b) The seller, as that is the person on the other side of the contract

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Re: 1st estate agent wants fees

#404324

Postby Lootman » April 14th, 2021, 9:06 pm

murraypaul wrote:
Lootman wrote:
murraypaul wrote:I think it is perfectly reasonable and fair that I be paid for introducing the person who ended up buying the house.

Sure, I already said they deserve some kind of finders fee. The issue is how much and who pays it?

And I'm sure you won't be surprised that my answers are:

a) What is specified in the contract, and
b) The seller, as that is the person on the other side of the contract

And as explained, that is merely one input into the determination, which will likely be based on a variety of factors. Or more likely, who wants it more.

At least, that is my real-life experience. Maybe yours has been different.

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Re: 1st estate agent wants fees

#404326

Postby murraypaul » April 14th, 2021, 9:10 pm

Lootman wrote:
murraypaul wrote:
Lootman wrote:Sure, I already said they deserve some kind of finders fee. The issue is how much and who pays it?

And I'm sure you won't be surprised that my answers are:

a) What is specified in the contract, and
b) The seller, as that is the person on the other side of the contract

And as explained, that is merely one input into the determination, which will likely be based on a variety of factors. Or more likely, who wants it more.

At least, that is my real-life experience. Maybe yours has been different.


To focus on b). If not the seller, then the only other option is the second agent?

So I'm the second agent.
The seller came to me to sell their property, I agreed, marketed the property and sold it, and got my commission.
File closed, seller happy.
Now you are coming back to me later and saying that because of something the seller had done previously that I didn't know about, you'd like me to give some of the money back?
Hell no, why on earth would I do that?
I've done my job, I've got my money.
Whatever issues the seller and first agent have, they are nothing to do with me, I wasn't party to their agreement.

However, to put the other side.
Depending on conversations we don't know about between the seller and second agent, it is possible the seller (not the first agent) could recover some costs against the second agent.

https://www.tpos.co.uk/images/Codes_201 ... e_2019.pdf
Fee Entitlement and Client Liability
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.
If no other estate agent is involved this time limit extends to 2 years.
• advise that the seller may be liable to pay more than one fee if they instruct another
agent during or after the period of your agency.
ask the seller if they have previously instructed another agent in respect of the
property
, and if advised yes:
• ask to see a copy of the previous agency agreement to ensure that by instructing
you, the seller will not be in breach of contract (note that if the seller is unable or
refuses to supply a copy, you must advise, in writing, that you are unable to advise
as to whether the seller is in breach of their agreement with the previous agent);
• specifically advise of the possible liability to pay more than one agent;
• 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).


If the second agent did not do this, the seller might be able to make a complaint to the Ombudsperson.

Equally the seller (not the second agent) might be able to recover from the first agent:
On dis-instruction, it will be a requirement of the TPO Code that
the agent discloses to the seller with a list of parties that they have
introduced, i.e. a list of those who have viewed the property.
If the seller signed a sole selling rights agreement, the agent must
advise the seller on dis-instruction, in writing, that a fee will be due
if any party who was introduced during


This is Dual Fee guidance referred to: https://www.tpos.co.uk/images/documents ... e_Note.pdf
Last edited by murraypaul on April 14th, 2021, 9:22 pm, edited 2 times in total.

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Re: 1st estate agent wants fees

#404329

Postby Lootman » April 14th, 2021, 9:18 pm

murraypaul wrote:
Lootman wrote:
murraypaul wrote:And I'm sure you won't be surprised that my answers are:

a) What is specified in the contract, and
b) The seller, as that is the person on the other side of the contract

And as explained, that is merely one input into the determination, which will likely be based on a variety of factors. Or more likely, who wants it more.

At least, that is my real-life experience. Maybe yours has been different.

To focus on b). If not the seller, then the only other option is the second agent?

So I'm the second agent.
The seller came to me to sell their property, I agreed, marketed the property and sold it, and got my commission.
File closed, seller happy.
Now you are coming back to me later and saying that because of something the seller had done previously that I didn't know about, you'd like me to give some of the money back?
Hell no, why on earth would I do that?
I've done my job, I've got my money.
Whatever issues the seller and first agent have, they are nothing to do with me.

Well, sure, but every party here is going to say it is "nothing to do with me".

Seller S is going to say he already paid the fee and the money is gone.

Agent B is going to say that he did his job and got his fee.

Purchaser P is going to say that it is nothing to do with him.

That is why there should be some kind of settlement conference or mediation to work out a compromise. Maybe organised by the professional association for estate agents.

Purchaser P is probably off the hook unless he concealed from agent B that he had already viewed through agent A because, by that omission, he caused the problem. Again if Agent B dd not ask the right questions to P and S then that could be an issue and a liability.

If I was arbitrating this I would give A a percentage, paid partly by B, partly by S and (if he lied) partly by P. Then again, if I were S I would ignore the whole lot of them.

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Re: 1st estate agent wants fees

#404332

Postby Mike4 » April 14th, 2021, 9:27 pm

Lootman wrote:

At least, that is my real-life experience. Maybe yours has been different.


My real-life experience was different, in a similar case.

I deducted £300 from a sole agent estate agent bill because their selling effort had been negligible and after weeks of inactivity I instructed a second agent to sell for me. Second agent knew the full picture and took it as a professional challenge to show up the first, and found me a buyer in about a day.

I paid both agents but deducted £300 from the first for poor performance, judging that such a sum was too small to go to court over. I was wrong and spent an entertaining day wasting their time in court putting my side of the story which was much as Looty says, that they did naff-all to deserve their fee and my deduction was reasonable in the light of their failure to perform.

Judge awarded them the case telling me in his summing up that although he fully agreed with me that they had not earned their fee, the contract stipulated it was due in full as it was a sole agency agreement, and the house was sold. How it got sold was of no consequence in law, the fact that it was sold made me liable to pay the fee.

Pretty much as I expected, but I was surprised the boss of the firm plus hired solicitor found it worth spending a whole day collecting £300 (inc VAT) from me.

Edit to add:
In my case their argument was different from the OP's, in that they argued that as a sole agent they were entitled to their fee even though another agent introduced the buyer. I think if the OP ends up in court, his/her agent will change their case and rely on this argument rather than that they introduced the buyer, as it is factual and less open to argument.

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Re: 1st estate agent wants fees

#404334

Postby Lootman » April 14th, 2021, 9:38 pm

Mike4 wrote:
Lootman wrote: At least, that is my real-life experience. Maybe yours has been different.

My real-life experience was different, in a similar case.

I deducted £300 from a sole agent estate agent bill because their selling effort had been negligible and after weeks of inactivity I instructed a second agent to sell for me. Second agent knew the full picture and took it as a professional challenge to show up the first, and found me a buyer in about a day.

I paid both agents but deducted £300 from the first for poor performance, judging that such a sum was too small to go to court over. I was wrong and spent an entertaining day wasting their time in court putting my side of the story which was much as Looty says, that they did naff-all to deserve their fee and my deduction was reasonable in the light of their failure to perform.

Judge awarded them the case telling me in his summing up that although he fully agreed with me that they had not earned their fee, the contract stipulated it was due in full as it was a sole agency agreement, and the house was sold. How it got sold was of no consequence in law, the fact that it was sold made me liable to pay the fee.

Pretty much as I expected, but I was surprised the boss of the firm plus hired solicitor found it worth spending a whole day collecting £300 (inc VAT) from me.

Yeah, I once spent an entire day debating with a solicitor for the other side, knowing that even if I lost it would cost the other party much more than the disputed amount in legal costs. As it happened they got part but not all of the amount due at the settlement conference. The solicitor paid me the compliment of saying that I "had a good legal mind" but also called me "snide, self-serving and litigation-savvy". I took that as a compliment as well :D

I think some claimants see it as a matter of principle and will happily pay £1,000 to get a judgement for £300 that they cannot know for certain that they will ever be able to collect.

I have other similar stories but that would take us way off topic. Disputes can be messy and unpredictable which is why most parties settle and compromise.
Last edited by Lootman on April 14th, 2021, 9:40 pm, edited 1 time in total.

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Re: 1st estate agent wants fees

#404336

Postby murraypaul » April 14th, 2021, 9:40 pm

murraypaul wrote:https://www.tpos.co.uk/images/Codes_2019_a5/TPOE27-8_Code_of_Practice_for_Residential_Estate_Agents_A5_-_Effective_1_June_2019.pdf

https://www.tpos.co.uk/images/documents ... e_Note.pdf


If the OP is still around, and so that those links don't get lost in a long post.
My thoughts would be:
a) You are probably liable to pay both sets of fees, however:
b) If the first agent did not advise you in writing when you terminated the agency that you might be liable for two sets of fees, and provide you a list of all introduced possible buyers, you may be able to make a complaint with the TPO and recover some or all of that fee
c) If you do make a complaint and inform the first agent of it, they may well hold off debt collection until the complaint is considered
d) If the second agent did not ask you about any prior agents, you may be able to make a complaint with the TPO and recover some or all of that fee
The general approach of the TPO is that sellers should always be informed when there is a chance of dual fees, and so if a seller gets to the point of having to pay dual fees without having been warned of that in advance (and the seller has been honest and open with both agents), it is very likely that one or more of the agents has failed to follow the guidance.
Last edited by murraypaul on April 14th, 2021, 9:44 pm, edited 1 time in total.

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Re: 1st estate agent wants fees

#404338

Postby Lootman » April 14th, 2021, 9:44 pm

murraypaul wrote:If you do make a complaint and inform the first agent of it, they may well hold off debt collection until the complaint is considered

Simply writing a "cease and desist" letter to a debt collector requires them to stop all collection efforts and activities. You can express your right to only deal directly with the (alleged) creditor.

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Re: 1st estate agent wants fees

#404342

Postby Mike4 » April 14th, 2021, 9:54 pm

murraypaul wrote:a) You are probably liable to pay both sets of fees, however:
b) If the first agent did not advise you in writing when you terminated the agency that you might be liable for two sets of fees, and provide you a list of all introduced possible buyers, you may be able to make a complaint with the TPO and recover some or all of that fee


I doubt the case will hinge on this.

I predict the agent will shift their claim to being a sole agent and therefore entitled to their fee, thus completely side-stepping any argument about who introduced the buyer.

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Re: 1st estate agent wants fees

#404348

Postby AsleepInYorkshire » April 14th, 2021, 10:13 pm

I'm not a lawyer.

It's possible that the first agent "incentivised" you. They told you something to incentivise you into a contract.

Do you have proof that they told you they would sell within 6 weeks? I assume not.

Is this kind of incentive advertised on their website. In other words does it say we will tell you how many weeks we will take to sell your house?

If you can prove they incentivised you and you signed the contract based on that then I would suggest you have a reasonable defence.

AiY

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Re: 1st estate agent wants fees

#404396

Postby Arborbridge » April 15th, 2021, 8:08 am

Lootman wrote:
Arborbridge wrote:I think the second agent could reasonably argue that his is due a fee for the work in processing the sale, whilst the first agent is due a fee for the introduction and work done in preparation.

Agreed. That is a good argument for the two agents splitting the fee, since they both did half the work, or so.

I do not see it as an argument why the client/seller should pay a double fee. In that situation I would invite the two agents to sort it out between them. They cannot reasonably both claim to have sold the property exclusively.


I completely agree, and in the majority of cases I am absolutely sure that this would be the outcome. The reputational damage to both agents of their not cooperating to help the customer wouldn't be worth a protracted argument.
Practicality should prevail: however that's different from the legal situation. I'd wager that both agents have a claim to the majority of their fee, if not all of it, because the client agree to each contract. Having said that, there are some details missing in the story, which may have a bearing and no doubt a solicitor would need to look at. The timeline, and what was said becomes critical, and though it's likely to be one word against another, there will be enough in writing the make decide.


Arb.

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Re: 1st estate agent wants fees

#404478

Postby Lootman » April 15th, 2021, 12:44 pm

Arborbridge wrote:
Lootman wrote:
Arborbridge wrote:I think the second agent could reasonably argue that his is due a fee for the work in processing the sale, whilst the first agent is due a fee for the introduction and work done in preparation.

Agreed. That is a good argument for the two agents splitting the fee, since they both did half the work, or so.

I do not see it as an argument why the client/seller should pay a double fee. In that situation I would invite the two agents to sort it out between them. They cannot reasonably both claim to have sold the property exclusively.

I completely agree, and in the majority of cases I am absolutely sure that this would be the outcome. The reputational damage to both agents of their not cooperating to help the customer wouldn't be worth a protracted argument.

Practicality should prevail: however that's different from the legal situation. I'd wager that both agents have a claim to the majority of their fee, if not all of it, because the client agree to each contract. Having said that, there are some details missing in the story, which may have a bearing and no doubt a solicitor would need to look at. The timeline, and what was said becomes critical, and though it's likely to be one word against another, there will be enough in writing the make decide.

If these kinds of disputes are happening a lot then maybe what is needed is a law that, say, caps the fee a seller has to pay to the higher of the two agents' fees. That would then encourage the agents to settle such disputes with each other rather than harass the poor seller here, who may be the only party who has behaved impeccably.

But the fact that this has gone to a debt collector so quickly strikes me as encouraging for the OP, as this is more likely to be a discussion than a court case. Whereas judges tend to be sticklers for the technicalities of statutes and contracts, negotiations with debt collectors tend to be informal and more about haggling and compromise.


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