Landmark ruling about whether an Estate Agent did enough to earn their fee!
An interesting case for Private Sellers and retrospective claims for Estate Agents fees was reported on the website Estate Agent Today last week.
According to Estate Agent Today, another case has been judged with reference to the Foxton’s case as a precedent and the result was the same (but different). In this case being judged on by the Ombudsman for Estate Agents, the Ombudsman ruled that it was not enough for Estate Agents to have introduced a buyer to a property, but they should also have introduced the buyer to the vendor to earn their fee.
This is the first time the Ombudsman has defined a minimum amount of effort the EA needs to put into the sale (and raises huge question about the Agents who continue to just hand out details and never do anything else, even not accompanying viewings. (A common practice in the eyes of many sellers - “Sorry there’s no-one available to go with you. Just call the seller and arrange a time.” - “You want to view on a Sunday? Are you mad?” - “We don’t work evenings.” etc.)
The specifics of the case
In this case a househunter registered with an Agent on September 1st 2007 and a viewing was arranged 2 days later to take place on the 15th. In the meantime the vendors cancelled the Estate Agent’s instruction on the 10th.
The frustrated purchaser promptly went around and knocked on the door to enquire if the house was still for sale. It was, and the buyer went on to purchase it privately. The property did not have a For Sale board outside it but was advertised online.
In time-honoured tradition, the Estate Agents put in a bill for £14K, but this time the seller reported them to the OEA who have just ruled in the seller’s favour.
The difference in this case is that the previous case (Foxtons - reported earlier here) merely had the fee re-allocated to another Estate Agent; this time the vendor did not have to pay any Agent at all!
This is a landmark decision because previously Agents have argued that should get a fee if there was any suspicion that the buyer might have seen their advertisements or publicity. It has even been argued that they were owed their fee if they even suspected that the buyer MIGHT have seen one of their ‘for sale’ signs. The legal onus has been on the seller of the property (or agent of the sale) to prove they DIDN’T.
(If this sounds far-fetched, this has actually happened and previously the Agent had won the case.)
One very interesting part of the article is this quote from the Ombudsman:
“If agents do all that (detailed recordkeeping of INTRODUCTIONS and subsequent actions, not just who registered with them), I am likely to find in their favour. But if someone walks into an agency and expresses interest in 14 Acacia Avenue, picks up the particulars and is taken on a viewing, and the agent does no more than that, and the applicant subsequently goes on to purchase after a reintroduction from another agent, I am not likely to be sympathetic to the first agent’s claim for a fee.
“After the Foxtons case, it is vital that agents show they have introduced the buyer to the sale.”
This ruling swings the balance back more to common-sense. It should not trouble those Agents who act in their customers best interests but it is obviously great news for private sales.