The complaint

The sellers instructed Agent A to market the property for sale and signed a sole agency agreement, entitling Agent A to a commission fee if a sale was agreed with a buyer they had introduced. After a few months, the sellers informed Agent A that they wished to instruct Agent B to market the property and asked whether they would be prepared to continue on a multi-agency basis. In response, Agent A said: “I’m happy for you to instruct a second agent from Monday, without change to our agreement.”

A buyer viewed the property via Agent B and gave positive feedback afterwards. Two days later, the buyer’s husband viewed the property via Agent A. As co-buyers, they made an offer. The sellers accepted the offer on the basis that Agent A’s fee would be based on 1% plus VAT of the property selling price.

Following completion, the complainants paid Agent A’s commission fee of £12,300. However around two years later, the sellers were contacted by a debt collection company acting on behalf of Agent B demanding payment of their own commission fee.

The investigation

Adjudication by The Property Ombudsman (TPO) aimed to determine which of the agents was the effective cause of the introduction of the buyers to the property and entitled to the commission fee.

The buyers first viewed the property via Agent B before viewing for a second time and making an offer to purchase via Agent A. Although each viewing was carried out by one co-buyer alone, as they were buying the property together it was deemed to be effectively the same interest.

The co-buyer who viewed the property first via Agent B gave positive feedback and expressed an interest in buying the property. Therefore, the adjudicator concluded that it was Agent B who generated the buyers’ interest in purchasing the property and was entitled to the fee.

The adjudicator was critical of Agent A for not warning the sellers of the possibility of becoming liable for more than one set of fees, in accordance with best practice, their duty of care towards the sellers and in-line with their obligations under paragraph 5 of the code. Agent A should have also asked whether the buyers had previously viewed the property and recorded the response.

The award

A £12,600 compensation was awarded, comprised of compensation for the financial loss equivalent to Agent A’s fee of £12,300 plus compensation of £300 for the distress that the second claim caused to the sellers.