OMBUDSMAN
Christopher Hamer,
The Property
Ombudsman has been
deciding some tricky dual
fee liability cases
I
n most cases only one agent is placed their own property on the market

instructed to sell a property and their with Agent B. The Seller Complainants
contractual right to a commission fee is terminated their agreement with Agent A,
not disputed. instructed Agent B and went on to sell the
However disputes where both agents property to the same buyers using Agent B.
have claimed a fee for selling the same Neither Agent A on disinstruction nor
property have always been a regular cause Agent B on instruction advised the
of complaint. Lately I have seen an increase Complainants that there was a potential for
in the number of such disputes perhaps two fees to become due. Agent A did not
because of market conditions or the provide a list of those individuals they
Foxtons judgement. could claim as potential purchasers
The Property Ombudsman Code of through them and Agent B made no
Practice is intended to ensure that no seller attempt to find out from the sellers or
is unwittingly put in a position where he is Agent A for which individuals that agent
liable for two fees for the sale of a property.
Some of the scenarios that come before me ‘The desired
might claim a fee based on introduction.
Agent A discovered the sale prior to
arise as a result of a complainant paying the
estate agent whom, they believe, effected outcome is that
exchange of contracts and informed the
Complainants of their contractual
the sale and then being pursued by another
who claims that they are entitled to a fee. I an ‘innocent’ seller
agreement and entitlement to a fee. I
concluded that Agent A had been the
have seen a trend where one estate agent
will claim a fee based on being the effective should only pay
effective cause of introduction but that
Agent B‘s contract was very clear in that
introducer and/or having held
negotiations, but one or other of them will one fee.’
they were entitled to a fee for negotiation.
However because the sellers had
be unwilling to negotiate a share of a single innocently been put in the position of now
fee. Such claims may arise as a result of a being liable for two fees, whilst I upheld the
sole agency contract being terminated and agents are required to give the necessary contractual position, I made a resolution
second agent instructed or when a buyer warnings about the potential dual fee whereby each agent gained half the fee.
who may have viewed through the first liability and explain this to the seller on Such instances tend to arise out of
agent comes back to view or offer on the instruction and termination. The desired general confusion on behalf of the seller
property through the second agent. outcome is that an ‘innocent’ seller should client, which can be further exacerbated by
Another instance is where a second agent only pay one fee. the buyer’s, albeit innocent, action. Whilst
is instructed prior to the expiry of the I ascertain whether the agents involved dual fee liability clauses are often included
initial Sole Agency agreement and a buyer have discussed sharing a fee. If not, I in agency agreements estate agents need to
is introduced by the second agent during generally decide on the extent that I feel ensure that they fully explain to their seller
that period. the complainant has been disadvantaged clients the events that may lead to dual fee
When examining such complaints I and any compensation takes into account liability and protect their clients’ interest
consider whether the estate agent claiming any additional expense incurred as a result particularly where one agent is
the commission fee is able to show that of the shortcomings on the part of one or disinstructed and another instructed in
they had carried out a positive fee earning both of the agents involved. relation to the same property.
event and so became the effective cause of A recent case came before me where
the sale of the property to the buyer. Under Agent A marketing the property undertook
Any comments? www.propertydrum.com/
section 3m of the Code of Practice, estate a viewing and the prospective buyers then
articles/ombudsmanjuly
PROPERTYdrum JULY-AUGUST 2009 43
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