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Joshua
Joshua, Lawyer
Category: Law
Satisfied Customers: 25426
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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We have recently sold a property and due to our perception

Customer Question

We have recently sold a property and due to our perception of poor service, we do not want to pay the full 2.5% fee - £6,750 inc VAT. We went down the auction route which explains the fee. We agreed with the agents a starting price of £199k with a reserve of £220k.
The reason we think the service is poor is:
1. Prior to auction we received an offer above the reserve price of £225k and we told the agents to accept the offer. The agents then phoned us back telling us not to accept the offer as we would receive a higher price at auction. They said we had received a high level of interest in the house and thought this was going to be one of their star sales. I had reviewed the viewings with one of the agents and had thought that despite the number of viewings, there wasn't a great deal of real interest (the house needs £60-80k of work) and that £225k was a good offer. However, because they were so insistent, we went with their advice. On the date of the auction, the house did not sell.
2. Prior to auction date an issue with access rights of a neighbouring house was raised - the house next door has the right to park 2 cars on the driveway beside their house. On auction day itself, the same people who offered £225k that we had turned down, had gone through the deeds, noted this issue and then prior to the auction starting made another offer of £225k but with the understanding that we would help them resolve the access issue. Again, we said no to the offer due to what the agent had said. The agent was fully aware of the rights issue. The agent had even phoned me 3 days prior to the auction to discuss the house sale and I went over the rejected offer and he again told me this was the right thing to do. He said if they had offered £300k he would have told us to accept it. After the auction, the same people whose offer we had twice rejected then offered £180k. Following the agents advice potentially cost us £45k and a lot of stress.
3. A few weeks later we received a letter from a solicitor who said he represented a genuine cash buyer and that he was having to contact us directly as the agents for some reason, would not deal with him. The solicitor managed to get our address details from the deeds and contacted us directly. We have no idea why the agents would not deal with him. There was no underhand intentions behind the contact as the solicitor knew we were contracted to the agents. The agents admit it is 'uncommon' that this would happen and refute the situation.
4. I started to negotiate with the solicitor from 3. above as he represented a genuine buyer. I managed to get them offer £210k with access rights not sorted. Using this, I went back to the agents and instructed them to tell the original buyers from 1. above that we had received a genuine no strings offer, and they immediately reinstated the £225k with no strings. We took that immediately.
As it is auction rules, the agents have already received a deposit £3000, so are owed £3750. I have offered to pay half the fee but they have rejected that and have said they have 'no alternative but to begin County Court procedures for the recovery of the debt + costs.
I would like to know firstly, if I have a case to withhold fees - if I genuinely don't, I will pay up, and secondly what procedures can they start against us?
I have never been in a situation like this before. I acknowledge that they introduced us to the purchaser and that we have a contract for 2.5%. However, I feel that their service has been so poor and that their advice has not been in our best interests. What do I do?
Submitted: 2 years ago.
Category: Law
Expert:  Joshua replied 2 years ago.
Joshua :

Hello and thank you for your question. I will be very pleased to assist you. I'm a practicing lawyer in England with over 10 years experience.

Joshua :

May I ask if the agent is a member of an Ombudsman scheme please?

Joshua :

From reading your post, do I understand correctly that in the event you did not suffer financial loss, eventually achieving £225K but the route you took to get there was in your view unnecessarily difficult owing to the involvement of the agents. Is that correct?

JACUSTOMER-vto3xf3r- :

I have just checked their website and there is a sign for the Ombudsman scheme.

JACUSTOMER-vto3xf3r- :

No we did not suffer financial loss as I managed to regain the sale. I am unhappy about their advice - telling us not to accept the offer and the house then not selling, and I'm unhappy that they would not deal with the solicitor causing him to write directly to us.

Joshua :

Thanks. Good. Membership by Estate Agents of one of three approved redress schemes became mandatory since 2007 by virtue of the Consumers Estate Agents and Redress Act 2007. Based upon what you say I concur with your assessment in that the agents service based on the facts as you state them would appear to fall below the reasonable standard one would be entitled to expect.

JACUSTOMER-vto3xf3r- :

What do I do now as they are threatening County Court?

Joshua :

It is true that the agents may have a defence to your complaints that they gave you the wrong advice reference the offer you received versus the auction, though one can expect a better reading from a professional estate agent of the position but failing to pass on an interested party is illegal and a breach of the agency - principal relationship.

Joshua :

Sorry for the short delay. I will be with you in a few moments...

Joshua :

Apologies - I am back.

Joshua :

It seems to be you have two bases for arguing the agents fee is not payable in full:

Joshua :

The first is that the agents are in breach of contract under the terms implied under the Supply of Goods and Services Act which require their service to be fit for purpose of reasonable quality and as described. Based on what you say you have a basis to claim that their service was not of satisfacgtory quality as you retain an agent in the main to procure that you achieve the highest price for your property. You have evidence from what you say that in this case they achieved largely precisely the opposite in this case

Joshua :

The second basis is relying on the decision in Foxtons v Bicknell in the Court of Appeal. Here the The court decided that merely 'introducing' a buyer to a seller is not suffiicient. The court decisded that what an agent needed to show to collect commission is that they introduced a buyer to the 'purchase' and not just to the 'property'. In other words the actions of the agent led to a purchase. Here you may potentially be able to argue that the agents actions did not lead the purchaser to purchase but you had to recontact them and procure their further offer. If you can show that the agents did not introduce the buyer to the purchase you may be able to argue that no fee is payable at all though this may be optimistic.

Joshua :

In any event whichever argument you employ (or both) you have a right to initially formally complain to the agent - if you have not already done so. If you are not satisfied with their formal response, you can refer your complaint to the Ombudsman scheme of which they are a member. That Ombudsman offers a free service to determine complaints about the agent and their determination is binding on the agent but not you.

Joshua :

If the agent issues proceedings against you in the county court whilst your complaint is being determined, you can ask the court to adjourn the claim pending the outcome of the Ombudsmand determination which is very likely to be agreed.

Joshua :

If you are not satisfied with the Ombudsmans decision you reject their determination and allow the matter to proceed to court.

Joshua :

Have I been able to help you with all your questions on the above?

JACUSTOMER-vto3xf3r- :

I have already emailed the agents twice setting out exactly why I do not believe they deserve their full fee. Does this count as a formal complaint, or do I need to explicitly state this is a formal complaint? They have replied in detail once, and the second reply has been the notification of taking this further if payment is not received within 7 days. Does this count as their formal response?

Joshua :

That depends if they have chosen to treat those emails as emails as a complaint. If they have they should give you a copy of their complaints procedure and advise you of your right to use the ombudsman. I suspect they have not as agents are rare to volunteer the existence of the Ombudsman as it is a powerful tool for the consumer. If you feel you have already set out everything and having nothing further to add you can shortcut the process by advising that you consider your previous emails to be formal complaints and that you are not satisfied with their reply and that you should be grateful to receive details of their Ombudsman service (it doesn't matter that you already know) and confirmation they have nothing further to offer or add to their earlier response. This will allow you to refer the complant to the Ombudsman - the reason for the above is that the Ombudsman cannot deal with a complaint unless you have first formally complained to the agent and received a final response.

Joshua :

Does the above answer all your questions or is there anything I can clarify or help you with any further?

JACUSTOMER-vto3xf3r- :

Can I clarify one further point, you said that the agents not dealing with the solicitor was illegal? Can I not use this as well.

Joshua :

It is unlawful for an agent to fail to pass on an offer. If there was no offer but they simply failed to pass on an interest party this is still a breach of contract under agency law and you certainly can raise this as one of your principal areas of complaint.

Joshua :

Is there anything above I can clarify for you?

JACUSTOMER-vto3xf3r- :

No I think that is everything. You have been extremely helpful and given us a way forward.

Joshua :

I am glad I could assist. If I can assist any further as the situation develops please do not hesitate to revert to me

Joshua :

Good luck with your complaint. If you have no further questions for now I should be very grateful if you would kindly take a moment to rate my service to you today. Your feedback is important to me. If there is anything else I can help with please reply back to me though

JACUSTOMER-vto3xf3r- :

Thank you

Joshua and other Law Specialists are ready to help you
Customer: replied 2 years ago.

Hello.

I followed your advice and sent a letter informing the agents that my complaint was now a formal complaint. I asked for a copy of their complaints procedures and asked for a formal final response to my complaint.

I have just received a reply which I am sure is trying to worry me, but its succeeding. Could you let me know where I stand please.

"To re-iterate, we have reviewed your complaint and replied in relation to each issue within previous correspondence. We certainly do not consider any part of the com plait would warrant a reduction in our fee as we have conducted the marketing and sale process based on the information you have supplied at the outset and have concluded the sale to a buyer that we introduced to the property. Therefore our fee is due in full and without deduction.

Whilst we note your intention to file a complaint at the Property Ombudsman we are aware this process can take a considerable timescale to reach conclusion therefore if you wish to use this route the balance of our fee must be paid in full by return. The Ombudsman will not review the case if County Court Action is progressing for non payment of fees and furthermore, will take note o the advantage to sellers who do not pay their account on time and this is reflected in any award subsequently made. Therefore as a complainant you would have two options:

1. Pay the balance of the fee by return and lodge a complaint. As we are bound and adhere to the rules of the Ombudsman we will follow any subsequent recommendation they make after they have reviewed and concluded on the case.

2. Withhold the fee and lodge a complaint. As stated we are not pre parted to allow the Complaints process to be used to delay further the settling of our fee note. Therefore, we will initiate County Court procedures against you for the recovery of the fee. The Ombudsman have stated they will not review a complaint whilst a legal claim is ongoing and you risk receiving a CCJ against you at the conclusion.

Full guidance........

Therefore, in conclusion, we again request that payment is made by return to avoid County Court Action. This will also allow your complaint to be heard by the Property Ombudsman."

Sorry to write it in full, but easier than trying to summarise.

Is this right? If I complain to the Ombudsman, they will start Court procedures which will effectively stop the complaint?

Also, is it better to pay now and await the outcome. My feeling is this is nonsense as the minute we hand the cash over, I can't see how we'll get it back.

Where do I stand?

Johanna

Expert:  Joshua replied 2 years ago.
Sorry for the delay in reverting to you.

It is true that the agent can begin court proceedings if you havealready complained to the Ombudsman or that they can do so before you complain but in either case if they do, you can ask the court to adjourn proceedings until the Ombudsman has made their determination. The courts always encourage alternative dispute resolution (ADR) and the Ombudsman serves as ADR. It is therefore highly unlikely the court would agree that proceedings may proceed until the outcome of your complaint to the ombudsman is known particularly as the ombudsman's decision is binding on the agent.

I cannot see it is in any way to your advantage to and over any cash as they propose unless it is your intention to pay it and be done with it. it is well-known that agents dislike the existence of the Property Ombudsman services but they are bound by their decisions whether they like them or not.

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