A large London and south-east estate agency firm has lost a Court of Appeal case that prevents estate agents from claiming a joint commission fee on property sales if they cannot prove they introduced the buyer to the property.
The appeal court ruled estate agents Foxtons is not entitled to commission on the sale of twice, London, home, despite initially introducing the buyers.
The case was originally upheld by Kingston upon Thames County Court, but appealed by homeowner Treld Bicknell, who appointed Foxtons in 2004 as sole agent to sell her home for £1.4m.
The contract terms said Foxtons would be paid 2.25% of the sale price on exchange of contracts as sole agent, and 3% as a joint agent. The contract’s wording was almost identical to the Estate Agents (Provision of Information) Regulations.
Foxtons introduced a prospective buyer to the property but no sale went ahead.
In July 2005, Bicknell appointed another agent, Hamptons International, to sell the property on a multiple agency agreement.
By October, Hamptons had arranged for the same original prospective buyer as Foxtons to visit the house again, and, by the following January this couple bought the house for £1.15m.
Foxtons claimed 3% commission for originally introducing the buyer to the property.
Lord Justice Waller said: ‘What is clear is that there is nothing to suggest the prospective buyer's interest in October 2005 was based on Foxtons’ earlier activities. It is also clear that no sale would have occurred without the view on 15 October by Hamptons International.’
Foxtons said: ‘While it was disappointing, the court has given much-needed clarity on the question of entitlement of an agent to sales commission.’ |
