Ask a Law Question, Get an Answer ASAP!
Dear Sirs I am a non retained property agent who introduces property developers to suitable development opportunities in the UK, I will for example set up a meeting (introduction) for a developer with a landowner and they will agree to pay a commission on the purchase value of the site. Some time may elapse and the developer may be very slow in coming back with an offer and in the meantime the land owner has decided to appoint an agent or advises the developer directly that they will go to a shortlist and the developer then subsequently phones me up saying the site will be going to "market" so will not want to pay me an introduction fee. I see the "effectiveness clause" used time and again in articles. If I set up a meeting with a vendor and a developer to discuss purchase, should this not constitute an "effective " introduction for a non retained agent so that a fee is due? I find that I can go to a great deal of time and effort to source a suitable development opportunity for a developer only for them to then try to reneg on an agreement. I have email correspondence which demonstrates the set up of the meeting and further discussion with the vendor and developer following, I also discuss the introduction with the developer and include the terms (below) as they will not sign a formal agreement but discussion on email continues following "Our Company are not retained by the vendor so as discussed and agreed we will be seeking the payment of an introduction fee. Should you, your Company or any associated Company exchange an option or contract to purchase this project, you are agreeing to pay our fee being 2% of the purchase price plus VAT, or gross land value in the event of a joint venture or situation where any accommodation is returned to the vendor plus VAT. This fee would be payable should you, your Company or any associated Company assign or trade the option or contract. Any negotiations need to be conducted through ....... unless otherwise agreed" Clients are generally property developers such as volume house builders and niche developers. I should be entitled to my fee even if they are trying to reneg on the agreement? Thanks
Hello my name is ***** ***** I will help you with this.
For now please let me know whether anyone signs YOUR terms and conditions?
An agreement is not signed, introduction terms are discussed and then included on the email with details of the site and dialogue goes on eg setting up meetings and further questions asked by the developer
Terms included in the email are my standard terms:
Our Company are not retained by the vendor so as discussed and agreed we will be seeking the payment of an introduction fee. Should you, your Company or any associated Company exchange an option or contract to purchase this project, you are agreeing to pay our fee being 2% of the purchase price plus VAT, or gross land value in the event of a joint venture or situation where any accommodation is returned to the vendor plus VAT. This fee would be payable should you, your Company or any associated Company assign or trade the option or contract. Any negotiations need to be conducted through ....... unless otherwise agreed
Ok, thats fine......
So what's an issue?
Some developers turn round and say we have no agreement because they have not signed an agreement, some subsequently try and introduce their own terms following continuing dialogue that if the site goes to formal marketing I will not be due a fee, some just say take me to court.
Why dont you get them to sign terms before you even discuss?
My question is therefore if I include the terms in the email and dialogue continues and we have a meeting etc is this enforceable in court as a recognized introduction in the eyes of the law or do i need a formal written agreement / email confirmation from the developer that specifically states they accept my terms / or a inclusion in the terms that "continued dialogue will confirm acceptance................
Yes. If you say these are my terms, by discussing the matter you agree to be bound by them.
That is valid and can be enforced.
developers will not sign formal agreements as they want to know details of sites before they do and many regional offices are scared of signing agreements making them liable to fee payments for £100,000`s of pounds, many of the large plcs have a culture of saying they will pay introduction fees but not honouring them.
Ok. Well by saying the above they are bound yes
You may it clear by continuing they will be bound, so if they still talk to you, its clear what the consequences are
Does that help?
so the key is the continued dialogue following stating my terms, I`ve just had comment in the past that if there is no formal agreement it will not stand up in court.
No, that isn't correct. Clearly a written signed agreement is better, but contracts can be oral as well as written
Clearly here you say by talking to me you are bound
So if they continue talking the intention is clear
Can I clarify anything about this today for you?
So its the email trail which is evidence of further discussion that would lead to being able to enforce the fee in court. Verbal agreements are all very well but impossible to prove!
Impossible unless there are witnesses, but email is good!
Does that clarify the position for you?
If this answers your question could I invite you rate my answer before you leave today.
If the system won’t let you please click reply.
Please bookmark my profile if you wish for future help: http://www.justanswer.co.uk/law/expert-alexwatts/
Can you please tell me about the "effective cause" argument in relation to introductions for non retained agents as I stated I get referred to this by the developer, but this should only apply to agents that are retained by the landowner.
Well I dont think they can use that. The law states if you work you are entitled to a reasonable fee for that.