The issue of dual commission fees looks to be a growing concern, The Property Ombudsman revealed yesterday.
It said that in 2017 it received 32 complaints relating to dual commission – where a seller has to pay both a first agent as well as a second one. Last year, it received over 50 cases.
Topics discussed at both a consumer and an industry forum which met last October were only reported yesterday by TPO, which set up the forums to discuss specific issues “which could result in consumer detriment”.
Yesterday’s report says that the issue of dual fees was presented by Alison Farrar, an investigator for the industry regulator NTSEAT (National Trading Standards Estate Agency Team).
TPO’s report says: “It was agreed that transparency to the seller at every stage of the process is required and agents need to highlight the circumstances where dual fees could become due if a seller decides to use a second agent.
“Because of the level of detail in a contract, many consumers fail to read and understand all of the information outlined; one solution is to highlight essential information on page one, such as where a seller may be liable for a dual fee.
“Further work will be undertaken by TPO on the issue to provide clear guidance with case study examples.”
The forums also discussed the issue of advertising weekly, rather than monthly, rents. TPO reports that tenants mistakenly multiply the weekly figure by four rather than by 52 and then dividing by 12, leading them to believe the rent is lower than it is.
The forums agreed that advertising the weekly price is acceptable, and has been done for years in London. However, they said that the weekly rent should be advertised alongside the monthly rent, in the same size font.
The forums next meet on February 27, and will discuss referral fees and leasehold guidance.
Comments (9)
It said that in 2017 it received 32 complaints relating to dual commission.
How many were upheld? Now divide that by the number of instructions. One is arguably poor but for anyone to say this is an industry wide problem ….
sounds more like someone’s a jobsworth that would be better employed being more effective in worthy areas, like those that charge for not selling and say they are the same as other agents who do not (the majority of agents).
Given that one passive intermediary listing firm takes a fee for an in perpetuity, till sold, commitment to vendors, a savvy and PR bold agent [instructed once a forlorn vendor has given up all hope of their internet listing and umpteenth expert will yield a buyer] ought to be charging their standard multiple agency rate card on completion.
Fair point Robert.
Would it now (post emoov debacle) be sensible for the regulators to insist that pre/deferred payment call-centre agents have enough cash funds available to repay their service or perpetuity commitments should they run out of money and become insolvent thereby failing to fulfill their contractual obligations?
Without cast-iron, sufficient further funding guarantees for 2019/2020 are HouseSimple, Yopa, and PB Directors placing themselves in the firing line?
With vast losses over several years between them, at what point do these Directors declare that their businesses are not financially viable?
Surely, now we have a precedent, these Directors will not wait till the money runs out forcing many 1000s to pay two estate agency fees?
Is this what NTSEA team ought to be considered as a matter of great urgency?
So how many of the 5000 emoov V1 customers are now likely to pay two estate agency fees on top of the 10,000s of other pre-paid/deferred payment hybrid users who failed to secure a completion?
Can you spot fee payable regardless of sale on PB’s home page?
Warning: Fees payable regardless of sale, insolvency or whether you have any viewings?
Why can’t TPOS set up an arbitration arm to deal with agent vs agent issues?
Vendors want agents to sort it out.between themselves but as it stands as the agents agreement is with the seller the only option if the other agent refuses to discuss is to take action against the seller.
The first agent is often the villain of the piece, usually with agent 2 stirring it up but then you have the corporates ‘coffin chasing’ historic viewings.
Surely arbitration is best for the consumer as they don’t get dragged into it, and best for our industry with our squabbles being played out in public?
Sadly, there remains an element within our industry who will do anythig for the money!
I relayed a ‘confidential’ story to EYE a few months ago which defies belief.
Agent 2, despite the named contract exclusion of the eventual purchaser, tried to have the fee, and when they reaised they wouldn’t get away with it, invented a spurious ‘negotiation fee’.
In that particular instance the seller was not financially disadvantaged by the dual fee situation as the purchaser, unbeknown to them, covered the significant ‘extra’.
How does one legislate when the head honcho of one of UK’s alleged ‘top’ agencies ‘himself’ pulls a stunt like this?
If he was working for me he’d have been fired!
U rely most vendors who employ the call centre pay us up front and you’ll never hear from us again brigade should be included in these figures? That would give the ombudsman something to do!
Whilst this may be an “issue” it is undoubtedly usually caused by a vendor looking to break the terms of their agreement with the first agent.
I am sure there are some agents that perhaps don’t explain the “dual commission liability” as well as they might but I have yet to see an agency contract that didn’t include. Vendors should read the contract.
The issue that often arises out of these situations is “effective cause” where a buyer viewed through first agent, nothing happened and then went back and offered some time later via the second agent.
Important to try and establish any previous “interest” to avoid the issue but usually ends up in a negotiation between vendor and two agents. Ombudsman usually applies a six month rule but will depend on whether first agent actions in terms of applicant management.
I am sorry Mr and Mrs Vendor but not only do we explain verbally the terms of our agreement but we ask you to countersign that it was explained to you verbally and you understood it. Why did you then think that you could wriggle out of it and then feel the victim of two charges? 32 complaints in fairness, is not many to the Ombudsman.