A couple who were taken to court for non-payment of an estate agent’s fee have won.
George and Hilary Wood were taken to Weymouth county court by a firm acting for Palmer Snell, a Countrywide brand trading in Lyme Regis.
The Woods were told of a couple who were interested in viewing their home, but by that time had decided only to accept viewers whose own homes were on the market. This couple did not meet the criteria as they had two homes to sell, and Palmer Snell could not provide a timescale. Nothing further was heard from Palmer Snell about this couple, Mr and Mrs Luckraft.
The Woods changed agencies, to Fortnam Smith and Banwell.
Mr and Mrs Luckraft then contacted the new agent. Their circumstances had changed and they went on to buy the property.
The Woods were then told to pay Palmer Snell £7,935. They went to TPO, who rejected their complaint.
The Woods were then issued with legal proceedings.
However, Judge Williams, presiding, dismissed the Palmer Snell claim, saying that to claim a fee an agent must be able to prove they were the effective cause of the transaction. An introduction to the property was not enough. The ruling is in line with that in an earlier Foxtons case, to which the judge referred.
This was Foxtons Ltd v Bicknell & Anr, May 2008 in the Court of Appeal where it was ruled that to claim a commission, the agent must have introduced the buyer to the purchase, rather than to the property.
EYE will report more on this new case tomorrow.
Comments (43)
Correct decision. In my 15+ years experience, unless you get them through the door it isn’t an introduction. Palmer Snell/Countrywide were having a laugh sending that invoice and expecting it to be paid. Absolute joke, they should be ashamed of themselves and I hope that they got landed with a hefty bill for the sellers legal fees as well. Typical Countrywide bully boy tactics.
And to address a point Smile Please raised above, a Sole Selling Rights contract would have made absolutely no difference whatsoever, the agent concerned still didn’t get the applicant through the door of the property so they didn’t ‘introduce’ them to it, regardless of what the SSR contract defines as an introduction (the wording on the contract is irrelevant if it isn’t compliant and legally enforceable which in this case it wouldn’t have been). Where would you draw the line? If you had a property on a multi agency contract and Mr & Mrs Jones saw it on an internet portal with your firm and printed the details out and took a drive down to look at it from the outside and saw the other agents board so called them to view it and subsequently went on to buy it (and obviously exchange contracts) would you invoice the client because they saw your advert on the internet first?
So playing devils advocate,
You have a board outside a property, fella goes round and knocks the door. Buyer and seller come to an agreement.
Sellers says they have a private buyer.
You would be happy giving up your fee if you found this out?
Completely different scenario so you can’t compare it against the scenario above. But to play along, if you have a signed sole agency contract then legally there is ****** all you could do about it as that only legally covers you against another agent selling it within your contract and notice period or it being sold to a buyer with whom you had negotiations during the contract period (I have had this happen, we invoiced for our fee, case went to court and we lost for the reason I stated), however if you have a signed sole selling rights contract then you are absolutely entitled to your fee as this covers the property being sold via any means to anyone during your contract term.
We have one agent in competition who uses sole selling rights, I use this against her Every.Damn.Time.
Seriously, this happens so infrequently that you make a judement call, for the once every few years you weigh up a court case vs the day to day business of agency
1. Oh, you’ve asked them to give you an appraisal? I’m not sure if they’re still doing it but be careful, our contract means that we have to genuinely find you a buyer and assist the transaction through to completion resolving pinch points where they arise, their contract means that for the ( excessive ) period of sole selling rights you could sell to your mum/brother/aunt/cousins goldfish and they will invoice you regardless
This agent did not sell this house.
A viewing did not take place; end of story. Tough luck matey.
Taking this report at face value, it seems a very odd decision by TPO. The original agent clearly was not instrumental in the sale and that fact alone should surely have seen TPO support the customer.
It is “who introduces the sale, not the client” isn’t it?
I mean if a rival firm showed Mr. Smith around a home, couldn’t get them to a high enough offer, then Mr. Smith didn’t buy it, but subsequently did from another firm, whose staff were good enough to get him to an acceptable offer, it is clear the 2nd firm should get the fee, surely? (This would be after the vendor changed agents properly of course).
That was my understanding and for cw to invoice in the case above is a joke. ha, what a pr disaster locally that would have been.
The purchase, it could be argued, is the point when a property unconditionally exchanges contracts and not just an offer, subject to contract, is made.
The law, despite the Foxtons case, is still a paradise for lawyers and a nightmare for consumers. We need to change the way we convey property in England and Wales.
Doesn’t smell right to me, making an invoice attempt for something like this is just plain wrong, the vendors were entitled ( not necessarily right ) to accept or decline viewings on their property as they saw fit and you win some you lose some, no way I’d have sanctioned it here and if I’d been at corporate I’d of been embarrassed if told to do so. Whatever next? It’s like the bad old days of ” we sent them the details “
OLD news
https://www.telegraph.co.uk/news/newstopics/lawreports/1935750/FOXTONS-LTD-v-BICKNELL-and-ANR.html
I think this is a good message to estate agent owners to look at your contracts and make sure you are covered for every eventuality.
If i was Palmer Snell i would feel hard done by, but obviously their contract did not make clear what an introduction is and they need to record it on their system to show an introduction was made and the vendor refused it.
If there is no viewing, it is difficult to claim that you were the effective cause of the transaction.
If you have a time stamp on your CRM system, you can evidence when a call is made to the vendor and they rejected the viewing.
Most agents now have VOIP phones and can even clip the converstation to the vendor where they can prove the vendor refused the viewing.
This is an example of how tech can help agents unlike a lot of what is promised to help and never does.
Sadly it looks like PS did not do this so becomes their words against them.
* During my time at CW we used Reapit, and you could leave comments on the system which were automatically time stamped. I did take a vendor to court who privatly sold to a buyer and the only reason we won the case was the time stamp viewing i took along as evidence. Just saying we had a viewing was not enough.
The client is entitled to refuse viewings from someone who is not on the market – none of our vendors would entertain “carpet-treaders”.
Agreed, if the vendor tries to collude with a buyer to sell privately, but that is not the case here.
My interpretation of the ruling is that estate agency contracts that demand a fee for an ‘introduced buyer’ in these circumstances are not valid in the law. Put simply a judge would need a very special set of circumstances to allow two agents to claim a fee over the one buyer.
In stating that ‘Introducing the buyer to the purchase’ is the only way to claim a fee this implies you have to be the agent that agrees the sale, negotiates the chain and sees it through to completion.
We had a case similar. Purplebricks lost a buyer. A buyer we introduced saw it come back on market. We called them but had made offer through pb. As vendor had already paid pb guess who they sided with… bad times people bad times. The countrywide case u win some lose some. Once you’ve lost the instruction it’s game over I think.
That wouldn’t count given the ruling above, as an introduction to the property isn’t sufficient. This is the same as with the Foxton’s case, where the judge made it clear that the agent had to introduce the buyer to the “sale” not just the “property”.
If the other agent had introduced their buyer whilst still in the original agents SA period, they would have had a case but in the circumstances above, I think they were on a sticky wicket.
Foxtons case was based on a ‘Sole Agency’ contract.
I believe they have now rewritten their agreements and are now also ‘Sole Selling Rights’ and make provision within the contract on their definition what an introduction is.
Smile Please living up to his reputation of the most repugnant poster on PIE.
How’s the board knocking?
Shock horror agent wants fee for doing their job!
How is you business going Dom? paid all your tax? – Good man, 😉
dompritch134
Clearly, you have nothing to add to this debate.
So, what is your opinion on the collapse of Purplebricks average listing income. At £666 it is less than the minimum fee of £707.50(£849 inc. VAT).
“The average revenue per instruction rose 7% to £1168” “The revenue for the year was split 57:43 between instruction and ancillary revenue respectively (FY 2017:£1088 split 70:30)
£ 1168 x 57% = £ 666 instruction revenue per listing
£ 1088 x 70% = £ 762 instruction revenue per listing
How do you account for such a fall if PB have not reduced fees?
Where you been Dom? Have you bought some more pb shares and trying to fake them back upto 500p
I’m fairly certain it’s not possible to be that ironic without it being some sort of ic, ism or syndrome
Ahh yes of course you will pop up, how’s the camper van? Don’t like hotels?
Is it possible to have such delusions of grandeur and over exaggeration of ones self worth, without it being some sort of ic, ism or syndrome?
Hi Dom
Yesterday you stated “the new LPEs over the last 6 months, this is mainly due to the postcodes which they are solely allotted (not prime)”
I asked how you knew who was leaving and why ? But you didn’t respond, just thought I would give you another opportunity.
I ask PB LPEs and a territory owner that’s how.
dompritch134
Do you think the 64376 figure for listings in PB results is accurate? or does it include several thousand re-listings from previous years?
Is the collapse of Purplebricks average listing income not a concern?.
At £666 it is less than the minimum fee of £707.50(£849 inc. VAT).
Cyberduck replied yesterday with this information.
I have golf at 3.15 so that is it from me today.
No, Cyberduck tried to make the numbers stack against revenue without knowing exactly what was included.
The KPI numbers are provided by PB and as such they will know that they are comparing like with like.
The previous FD left in April, the new incumbent will have made damn sure these KPIs are accurate.
Perhaps you can ask one of your PB contacts?
If people start then leave in short order it usually a sign that the wrong people have been recruited or the realities of the job havent been explained to them properly, which do you feel it is in this case?
” If people start then leave in short order ”
What like Dom for his game of golf?
lol tawt ( backwards )
What an unfortunate time for him to have to leave………
Shall we start a crowdfund to raise enough money keep dompritch on the golf course? Permanently. And if we raise enough we’ll make cyberduck his caddy. Who’s in?
I think he probably means something different, we assume that he’s on the golf
” course ” when in reality he’s in his PB branded VW Golf GTi ( 2003 )
You need to explain your attempt at an insult there Dom, I don’t understand it. What has one of my company fleet vehicles got to do with anything? My firm has a requirement for a mobile office so I bought one. Some nights it gets parked in a hotel car park, some nights it’s on a camp site that allows me to be in the City for 7:30 which from a base in Devon isn’t as easy as it might be. Do I like central London hotels? No they’re too hot and too busy
If you are going to play this game at the level you’re attempting you need to do it without attracting the ridicule you’re heaping on yourself. The very first thing is getting yourself to a position where people care if you insult them. At the moment you’re an entry level developer who tarts up repo’s. What you’re doing now I’d retired from in 1989.
Every agent on Eye has a “Dom the developer” on their register, the amateur who takes on the scabby, paint and kitchen stuff that’s too small for the proper developers. You get on and make a few quid Dom, for what you do you’re doing fine, but even if your boat comes in 10 times a year you are not earning the sort of cash anyone who has money would be talking about, let alone boasting about.
One of the nicest people I know, the yin to your yang sits in coffee shops doing not much most everyday other than he does what you do in a year every other day. He doesn’t play golf, doesn’t have a Rolex he just gets on and profits and invests, profits and invests then has another coffee.
I am not being mean or cruel but seriously you are embarrassing yourself and denying yourself the respect your achievements deserve.
Ahh here he is.
Robert you really should calm yourself, you attack me personally constantly and when I reply with a few home truths it really seems to trouble you.
I have a great life, I travel the world, I have no boss and yes play golf whenever I want, so your feeble attempts to insult me are pointless.
Let’s get it straight you are a software salesman with a seemingly god complex (Robert oh no not him), anyhow enough of this.
I’m not being cruel but perhaps your delusions maybe get the better of you.
I will not reply further on this.
You are funny Dom, you have all that but when it comes to respect you’re a pauper.
I haven’t got a god complex it’s just being the polar opposite of you makes me seem that way
Smile Please – Exactly what wording could you have in your contract, which would need to be legally enforceable, that would cover a situation whereby someone who hasn’t physically viewed the property through you and subsequently goes on to buy it through another agent would leave the seller liable to pay your fee?
Something along the lines of:
If XXXX Agents introduce a potential purchaser to the property and you refuse the viewing and the potential purchaser goes onto purchase the property within a 6 month period you will be liable for our fee in full, irrespective if the viewing was conducted or not.
You would then need to put a definition of purchaser in your accompanying T&C’s.
You would also have to demonstrate the when the viewer called, when the seller refused the viewing.
A lot of the burden relies on the agent to produce proof and have a comprehensive agreement.
Otherwise, it is the same as Joe Bloggs knocking on the door of one of your boards say “cut the agent out and save a fee” – We moved onto sole selling rights contracts (not sole agency) a while ago for this very reason.
Do you honestly believe that a clause stating “If XXXX Agents introduce a potential purchaser to the property and you refuse the viewing and the potential purchaser goes onto purchase the property within a 6 month period you will be liable for our fee in full, irrespective if the viewing was conducted or not.” is legally enforceable? Good luck with that one!
If you can also identify the purchaser, the time they called and also the seller rejecting that viewing. All record, time stamped.
Yes, combined with a tight agreement I believe they would have had a good chance of obtaining the fee.
BUT all they did was go to court and say “we are due a fee” – No evidence, no contract stipulating what is and is not a potential buyer and in what circumstances and timeframes they have not got a leg to stand on.
Legally its the right result, morally probably not but i am sure the seller and the agent that did get the fee do not mind.
As i say, lessons to be learned, some agents may think its too long winded and not worth keeping conversations on file or going to the effort of rewritting contracts as this does not happen too often.
Sadly with the competitiors we face today, and the morals of some buyers and sellers i think we all should raise our game (myself included).
I’m with Smile on most serious issues, but not this one.
You can’t have your cake and eat it every time. Otherwise you can just throw a whole bunch of potential properties at a buyer and then claim a fee regardless of hard work and causation.
This case sounds like it went the right way, but I don’t see a scenario where an agent could reasonably expect to earn a fee in similar cases.
Exactly mrtickle. How any agent could reasonably expect to be able to claim a fee from the seller in the circumstances in the story above is beyond me!