No such thing as a free agent

Smith Partnership’s Jak Ward was recently instructed to advise and assist a local estate agency firm in the recovery of an agency commission debt from a wealthy family, seemingly intent on avoiding payment of the fees.

The case concerned a prestigious residential property in the heart of the Midlands countryside. The property boasted stunning panoramic views, multiple outbuildings and a plethora of bedrooms, bathrooms and reception rooms. 

After approaching the agent from which they bought the property, the Defendant vendors learned that the Partner that had marketed the property to them had moved firms. Having tracked down the partner, and negotiated the terms of an agreement, the Defendants instructed the Partner’s new firm and his old firm in an unusually named “Joint Sole Agency Agreement with Joint Sole Selling Rights”. After originally purchasing the property in 2007, the Defendants had renovated and renamed the property, adding around £250,000.00 to the value, despite the depression in the high-end residential property market.

The two agents were engaged by the Defendants under the Claimant agent’s standard terms. The Claimant agent took the lead in the marketing and selling of the property, and to all intents and purposes, if commission had been production-based, then the Claimant agent would have been rightfully remunerated. However, it was not. The term in question provided –

If unconditional contracts for the sale of the property are exchanged after the expiry date of the period during which we have joint sole selling rights but to a purchaser who was introduced to you during that period or with whom we have negotiations about the property during that period. 

After early interest in the property, culminating largely from the Claimant agent’s excellent efforts, the Defendants took the decision early in 2011 to terminate the retainer with one of the agents. It just so happened that the non-party agent had a wider and national presence in estate agency. The Defendants therefore terminated the agreement with the Claimant agent, at around the time that the Claimant agent alleged an introduction to the eventual purchaser was made. 

The property sold during the middle of 2011 for around £2 million to a well-known local family, who had been recommended to view the property by a Peer of the Realm. The Peer of the Realm had informed the eventual purchasers of the Claimant agents details. Then came the dispute. 

The total commission payment sought was around £50,000.00, to be divided between two agents, engaged in an unusually-named “Joint Sole Agency Agreement with Joint Sole Selling Rights”. One of the agents had been paid their commission fee; the case concerned whether the Claimant agent was entitled, upon the strict construction of the terms of the agency agreement, to payment in the peculiar circumstances of the case.

The Claimant agent asserted that countless conversations had taken place with the Defendant family over the interest of the eventual purchaser. After an extensive disclosure process, stretching to the Claimant agent’s internal logs, email servers and telephone records, it was revealed that there was no written reference of the eventual purchasers passing from the Claimant agent to the Defendants. The Defendants relied upon this fact, and denied the Claimant’s position throughout the process.

It came down to a finding of fact, and whether the District Judge preferred the Claimant’s evidence of what was discussed in telephone conversations, or that of the Defendants. Ultimately, through circumstantial evidence and the lucidly clear oral evidence of the Claimant agent’s residential agency team, the Claimant established that an introduction of the eventual purchaser, on the facts of the case, had in fact taken place, entitling the Claimant to its commission.

The case is unreported, having been determined at local county court level. With the case turning on its own facts, there is also no scope for the Defendants to appeal the decision to a higher court, but represents a peculiarly interesting story from start to finish.

If you require advice on whether you are entitled to remuneration under your terms and conditions, then please contact our Jak Ward for further assistance on 01332 225426.