A six-branch estate agency in North London is fuming about the redress process after losing a sales fee following an adjudication by The Property Ombudsman.
Greg Dusgate (pictured), who is a director of agency Brian Cox, says he has lost confidence in the ombudsman’s ability to make fair judgements after being caught up in a contested ‘dual fees’ case with competitor Haart.
The case will be a familiar one to many estate agents. A vendor instructed their property with a well-known corporate firm and a buyer made an offer on the property. But this did not come to anything.
This agent’s vendor then moved to Brian Cox and the same buyer made an offer which was accepted, and the property sold.
But Haart then claimed that they had introduced the buyer and claimed their fee off the vendor at which point she referred the case to TPO.
After an exhaustive investigation, TPO found in the corporate agent’s favour and Brian Cox was told to repay its £8,000 fee.
Dusgate says TPO decided the case largely on whether his negotiator had asked a ‘satisfactory question’ of the buyer about previous offers or viewings, and that no written record had been kept.
Although he accepts this weakens his case, he is exasperated that TPO does not take the track record of the negotiator into account, nor the previous good record of his agency.
Split the fee
“I believe a fairer adjudication would have been to split the fee between us and the other agent, but TPO wouldn’t listen,” he says.
“My view is that when it comes to cases like this TPO decides in the corporate agent’s favour because, otherwise, it looks useless and upsets a big corporate member, or the vendor has to pay two fees – both of which would be difficult for TPO.
“The other agent has a watertight case for a fee in the eyes of the ombudsman, even though they can’t prove they followed up the original offer and do not have to prove that the vendor was definitely aware of the offer that they received.”
Dusgate says agencies that get embroiled in dual fee disputes like this are in a difficult position because buyers and vendors cannot be ‘regulated’ but agents who decline to cooperate with a TPO adjudication, like his, can be threatened with ejection from their redress scheme and business oblivion.
The Negotiator put Dusgate’s points to TPO. The ombudsman, Rebecca Marsh (pictured), said: “We review every case based on the evidence provided by both parties, the agent’s obligations under the TPO Code of Practice and what is fair and reasonable in the specific circumstances.
“When considering commission fees, the TPO Code and associated TPO dual fee guidance, clearly sets out the steps agents must take to avoid putting sellers in the position where they unknowingly face a dual fee claim.
“Where an agent is unable to evidence that they acted in accordance with these obligations, we will not support their claim for their commission fee and will direct them to refund it to the seller if it has already been paid.
“If awards and directions are not complied with, agents will be subject to TPO’s compliance process, where sanctions such as expulsion from the scheme may be imposed.”