Important legal ruling supports Private Sales Websites!
During a major legal tussle between two heavyweight Estate Agents about who should get the commission on a £1.4 million house (Not worth the effort really - only £31,500.) the judge in a Court of Appeal decided that a critical point was the definition of a ‘purchaser’. By extension this also affects Private Sale websites - beneficially.
To cut a long story short, the house had been up with Foxtons who had introduced viewers but failed to sell it. The sellers then approached Hamptons and changed the Foxtons agreement from sole agency to multiple agency.
Whilst Foxtons were the sole agents they had introduced a couple to the seller but the couple had not decided to buy. When Hamptons later showed the same couple around they did decide to purchase the house. Foxtons demanded their commission from the seller using the now common argument “we introduced couple X and our contract states that they’d be liable if they sold the house to “a purchaser introduced by them”.
Foxtons went to court, and won but a crucial Court of Appeal has overturned the decision and the commission returns to Hamptons. The Appeal Judge based his decision on the definition of “purchaser”. He decided a potential “purchaser” only becomes a “purchaser” when they decide to purchase. Foxtons introduced the couple but they weren’t “purchasers” because they only became “purchasers” when dealing with Hamptons.
Why is this important for Private Sales Websites?
This decision is important because Estate Agents have been investing a lot of time and money into legal efforts to have Private Property Websites defined as acting as ‘Agents’ specifically for the purpose of allowing them to claim a fee even if the sale was directly by the owner using a website but an Agent had been marketing it previously or even at the same time. If the website was acting as an ‘agent’ they could make this claim (as Foxtons did.) This new ruling means they cannot now use this legal claim if a seller decides the Agent has not performed and they are going to sell it themselves privately.
The full report can be read at:
http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWCA/Civ/2008/419.html&query=foxtons&method=boolean