A Ewemove franchise has been expelled by The Property Ombudsman (TPO) after failing to repay all of an award following a dual-fee dispute.

The hybrid estate agency’s Wokingham branch in Berkshire, which subsequently ceased trading, sold a property on behalf of a client after a local competitor had failed to find a buyer.

But this unnamed competitor agent then claimed they were due their fee under the terms of their contract because they had ‘introduced’ the person later went on to purchase the property through Ewemove.

The high street agent then chased their former vendor client for payment of their fee claiming they had introduced the buyer.

By this time the Ewemove franchisee, which had not warned the vendor of a ‘dual fee risk’, had received their commission.  The vendor then complained to TPO that about the chasing emails and phone calls from their original agent, triggering an investigation.

Unfortunately for the Ewemove franchisee, TPO found in favour of the original agent and required it to repay their fee.

TPO says: “Wokingham Ewemove paid £1,800 towards an £4,872 award. However, after ceasing trading it failed to make any further payments. £3,072 remains unpaid. Ewemove Wokingham failed to refer a sale back to an agent who was found to have introduced the buyer placing the seller in a position where they were potentially liable for dual fees.”

Struggling

Nick Neill (pictured), Head Shepherd of Ewemove, says the Wokingham franchise had been struggling for unrelated reasons but the demand to repay their vendor put extra financial pressure on the business, contributing to its closure.

“Wokingham has been expelled from TPO’s scheme because it had ceased trading by the time the request to pay back the [remaining] fee was made, rather than because it had failed to do so.

“The wider point is that there is plenty of case law that points to a viewing not being proof of a business introduction and that in order to claim they have introduced a buyer and agent must do much more than just book an appointment,” says Neill.

“I believe it is unfair that in these kinds of dual fee cases end up often costing the consumer more – in this case the vendor has now had to in effect pay two fees, which goes against the spirit of schemes like TPO; namely to offer redress for consumers.”

TPO statement

“All agents failed to pay awards made and were referred to the scheme’s independent Compliance Committee, which ruled that they should be excluded from The Property Ombudsman scheme.

“However, it’s important to reiterate that of the 2,473 financial awards made to consumers in 2020, 2,433 were paid. 98% of Ombudsman awards are complied with by agents demonstrating TPO’s effectiveness in ensuring consumers continue to receive appropriate redress.

“As part of TPO’s process, notification of these expulsions have been shared with all relevant bodies, including both Local and National Trading Standards for further investigation.”

The ombudsman’s key advice to agents on dual fees, published three years ago, says: “Agents should take every step to ensure that the seller understands the risks when either disinstructing one or instructing another, and to adhere to the relevant parts of the TPO Code of Practice at such times.  This ensures the seller is properly equipped to make decisions when agreeing a sale.

“When dual fee situations arise, sometimes through no fault of an agent, I expect the agents to act to negotiate a split so that no seller faces dual fee payment where that seller is ‘innocent’.”