i'm buying the property I'm renting & need advice

[Helen Cowan]

Hello, I need some advice...i hope you can help
We've been renting our property with a local estate agent since sept05 & after no response through the agents we approached the owners directly to buy the property. We agreed a price & proceed with our solicitors.
Our estate agent is asking the owner to pay a fee (which we have agreed to pay 1/2 of)...can the owner get out of paying it?
Any advice welcomed.
Thanks

[cris/c]

As I understand it, the estate agent can only demand a fee for selling the property, if they have been engaged to do so by your landlord.

Just because they handled the letting does not, in my opinion, constitute a contract to sell the property. However, if they were advertising the property for sale, then I believe they can. It would probably be up to the landlord to challenge the fee if the agents were not passing on your interest in buying.

To clarify though,

1. Is the property currently on the market?
2. If so, has the estate agent in question, put up a for sale board outside the property or in the agency window?
3. If this particular estate agent is involved in selling the property, are they engaged as sole agents? This can make a difference because when negotiating the sellers fees there is a reduction for acting as sole agents and there are normally provisos added to the contract to cover the eventuality of a buyer approaching the vendor from other sources.

[Helen Cowan]

No the property never went on the market & the price was agreed between ourselves and the Landlord. The Landlord did notify the Estate Agents & they put up a sold sign. At that time they were asking for 1.5% but agreed to drop it to .75%
Have we left it too late too challenge them on the fee?

[cris/c]

Hello Helen,

Something does occur to me,

I presume the LL is paying the agents a fee for managing his property and he would be contracted for that.

There may well be something in his letting/managment contract alluding to a 'finders fee' to cover the eventuality of a tenant introduced to the LL by the agent, who then goes on to purchase the property.

If not, then I don't know why the LL allowed them to put a sold sign up and i would not be paying them a sellers fee.

Were you introduced to the LL via this agency?

One of my business associates owns a group of estate agents/letting agencies.

If you can bear with me until tomorrow I may be able to give you some more advice on this.

[cris/c]

Helen,

I have spoken to my friend regarding this issue. His busisness is selling and letting, this is his oppinion based on the information you have posted on this board.

1. If the landlord had not instructed the agents to sell his property they are not entitled to charge a sellers fee.

2. To be able to charge a fee, there would have to be a contract between the vendor and the agents, setting out applicable fees and signed by both parties agreeing all terms.

3. Even if there was a contract, they did not put forward your interest to the landlord so they were not doing there job anyway.

Why the LL allowed them to put up a sold board I can't answer, I suspect they did it to endorse their claim for sellers fee.

Hope this helps,

[Ericthelobster]

There may well be something in his letting/managment contract alluding to a 'finders fee' to cover the eventuality of a tenant introduced to the LL by the agent, who then goes on to purchase the property.Something of this nature is pretty common in agents' contracts: the LL needs to check the wording of his.

Whether or not this might constitute an "unfair term" and consequently not be upheld by a judge if the agent decided to sue, I can't answer.

[Tweedle Dum]

I think this issue has already been debated on these forums and the judgement was (if you can call it that) that it is classed as an unfair term and is unenforceable. Case law was quoted at the time I believe.

[Helen Cowan]

Thanks for all your advice.
I suspect I'm going to have a hard time persuading the LL to persue this any further at this late stage and specially as we've agreed to pay 1/2 already...what a mug!:(
The letting agents have reduced their costs as I presume they were aware that they had not acted in either of our best interests to buy/sell the property, but i suspect that it is a 'finder's fee' that has been agreed on the contract.
Thank you for your advice.

[Stevie]

There's only 1 person who can answer this and that's a solicitor, so ask yours, he's alreay acting for you on the purchase of your property so should be able to advise for free.
Unfortunately, unlike us mortgage brokers, estate agents are not regulated!!