You will know that agents are required to provide certain information to sellers in writing if a “sole agency agreement” is entered into. If you do not comply with the information obligations the estate agency contract will be unenforceable without a court order.
The importance of getting the statutory wording exactly right was emphasised in a recent court case.
A seller entered into an agreement with the first agent which was described as a “sole agency agreement”. The agreement explained when commission was payable, but did not inform the seller that damages in lieu of commission would be payable if the property was sold by a second agent.
The day after the sole agency agreement was signed, the seller sold their property to a buyer introduced by second agent. The first estate agent sued the seller for damages for lost commission.
The Court of Appeal held that the first agent was not entitled to damages for lost commission. The contract needed to expressly set out that the first agent was entitled to remuneration if the seller sold through a second agent.
The message is clear: contracts need to include all the statutory wording so that clients are left in no doubt about the agreement they are entering into with you. If you would like us to make sure your contracts are watertight, do give us a call. We can make sure you are properly paid for your work.
For more information please contact John Dalby at john.dalby@gregglatchams.com or on 0117 906 9418, or Iain McColl at Iain.McColl@gregglatchams.com or on 0117 906 9462.
