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Joshua
Joshua, Lawyer
Category: Property Law
Satisfied Customers: 25470
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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We are a letting agency that have a tenanted property that

Resolved Question:

We are a letting agency that have a tenanted property that an investment landlord we have would like to buy, the seller and buyer have agreed terms through us, however the landlord has signed terms with another agency though instructing them not to do anything until they here back from him as he wanted to speak to us first.

He has gone back to the agency to say he doesn't want to proceed as he has a buyer, the agency want their full fee even though told to hold fire, they have not marketed or visted the property yet. The terms were signed and posted back to the agency I believe for only 1 or 2 days.

Where does he stand ?
Submitted: 3 years ago.
Category: Property Law
Expert:  Joshua replied 3 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 :

Do you know if he has instructed them on a sole agency basis or sole selling rights basis please? The former is the more common arrangement

Customer:

he signed and posted terms which state the fee for sole and the fee for multi agency so quite vague, I did see somewhere agents have to give a seven day cooling off period ?

Joshua :

But not sole selling rights presumably? This is quite rare.

Customer:

no I can not see any reference to sole selling rights, I believe if a contract is sign in your own home a seven day cooling off period would apply. Would this be the case if the terms where emailed to the vendor and signed and posted back. The agent has not even been to the property yet ?

Joshua :

Thanks. If the contract was signed during a visit by the agent to the principals home then the Doorstep selling regulations do apply and he has 7 days to cancel. This only applies if the contract is concluded at the principals home however and not if he signed a contract at the agency's offices nor if the contract was subsequently concluded by post following an agents visit. if he has the right to cancel because the contract was concluded at his home then of course this right is absolute however even if he does not, I do not consider it is fatal by any means

Joshua :

Some agreements contain a cooling off period and if this is the case this is binding irrespective of the above. IN addition however following a high profile case of Foxtons v Bicknell the Court of Appeal decided that Foxtons (a large estate agency as you will know) was only entitled to charge a fee when it introduced a buyer that actually goes on to buy the property. It decided that introduced' meant introducing a buyer to the 'purchase' and not just to the 'property'. An agent cannot charge a fee where it dos not actually introduce a buyer that goes on to actually buy the property following this decision.

Joshua :

The OFT have issued guidance on the matter following the decision.
http://www.oft.gov.uk/news-and-updates/press/2008/81-08

Customer:

so where does this vendor stand, he has an agent that has been instructed for 2 days though have not yet visited the property and has a buyer through us ?

Joshua :

accordingly, on the basis that the agency question has failed to introduce a buyer who is willing to go on to purchase property, the client will not be liable for their commission fee though they may be liable for any incidental administrative expenses provided for by the agreement so far such expenses have already been incurred such as preparing a brochure and so on though I suspect that little if any work has been done in this respect

Joshua :

from your point of view, I would simply point your client in the direction of the above office of fair trading guidance and on this basis suggest he takes a robust line with the other agency. The decision of course must be his and his alone as to how he proceeds however on the basis of the above decision, I cannot see that he can be liable to the other agency if they have not introduced the buyer in question

Joshua :

is there anything above I can clarify for you?

Customer:

no thank you

Joshua :

If I can assist any further as the situation develops please do no hesitate to let me know.

Joshua :

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 though please reply back to me though.

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