Agents Fees

In the recent case of Foxtons v Pelkey-Bicknell the Court if Appeal considered the fee provisions in Foxtons terms of business. These were based on the Estate Agents (Provision of Information) Regulations 1991 but are similar to those used across much of the estate and lettings field.

There was extensive discussion regarding the nature of effective cause terms and whether these should be implied into the agency contract but the Court declined to make such an implication. The Court focused instead on the phrase “a purchaser introduced by us” and looked closely at its meaning.

Ultimately, Lord Neuberger, who gave the leading decision, took the view that the proper reading of this phrase was “a person who becomes a purchaser as a result of our introduction” and not “a person who at some time in the future becomes a purchaser” as was put forward by Foxtons.

This is an interesting decision. The Court was keen to point out that users of residential agents should be afforded more protection than those using commercial agents and wherever possible the position should be that a vendor or landlord should not have to pay fees to two agents in respect of work done. However, it is clear that the Court was unwilling to imply terms into the agreement that were not there and so, if a fee clause is correctly expressed it would seem to be the case that an agent can still seek a fee where an individual comes to a property through the seperate efforts of two sole agents.

PainSmith Solicitors have produced a clause which they believe will survive the decision in Pelkey and can supply this on request.

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