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Wed 8th September, 2010
News
Can selling my home via a property website still make me liable for my estate agents commission? |
31st August 2006 |
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This depends upon the terms of the agreement with the property portal and the estate agents.
The Office of Fair Trading (OFT) has issued guidance on the issue in favour of estate agents. In a warning to web site property companies it has stated that if the website allows homeowners to sell their properties online and offers supporting services, such as a for sale board, such companies may be classified as estate agents.
Thus, if a homeowner has a sole agency agreement with an estate agent but sells via an online property portal the estate agent may have a valid claim for commission based upon a breach of the sole agency. This may mean that a homeowner could end up with two payable invoices upon the sale of a property.
The effect of the OFT ruling is that homeowners have to decide between choosing an estate agent and trying to sell privately prior to signing any agreements to market their property.
An estimated 50,000 homeowners every year sell privately by advertising through national and regional press or online. Many homeowners have avoided estate agents’ fees of between 1 and 2.5 of the sale price by marketing their homes online for a flat fee of about £100, even if they had signed with an estate agent.
A number of mortgage introducers have online and offline links with private sale websites and are often encouraged to purchase franchises for such websites.
Typically, online property portals provide for sale boards and phone answering services; leaving vendors to arrange and conduct viewings and negotiate with buyers. The OFT says that a website would be classified as an estate agent if it introduced a client by sending out particulars, receiving and fielding queries from people wanting to buy or sell a property or putting up a for sale board.
It warns website property portals that “you will be misleading consumers if you state that you are not doing estate agency work when you are. If you are acting as an estate agent, you must comply with your legal duties” (currently governed by the Estate Agents Act 1979).
The ruling by the OFT could lead to many private sale website going out of business. Although, the ultimate decisions rest with the courts, the OFT guidance is likely to be highly persuasive.
The recent decision of the UK’s second largest property website, propertyfinder.com, not to permit private sale websites on its pages will also add to the woes of private sale websites.
The above answer is by way of general guidance only. Specific agreements and circumstances require tailored legal advice.
For further information, please do not hesitate to contact Mr Bill Dhariwal, Managing Partner, Lawcomm Solicitors, T: 02380 384404 E:bill.dhariwal@lawcomm.co.uk |
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