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Court of Appeal Ruling

The OFT is drawing consumers' attention to a recent Court of Appeal ruling that affects 'sole agency' contracts with estate agents.

The recent court case ruled that estate agents cannot claim their commission under a 'sole agency' agreement unless they can show that they have introduced the buyer to the purchase, and not just to the property.

In the case of Foxtons v Bicknell in April this year, the Court of Appeal decided that Foxtons was not entitled to a £20,000 fee after a buyer it had originally introduced to a property but who decided not to purchase the property at the time, then went on to buy the property at a later date through another agent.

The court decided that 'introduced' meant introducing a buyer to the 'purchase' and not just to the 'property'. In this particular case, the buyer had made it clear to Foxtons that she was not interested at that time in buying the property and therefore Foxtons could not claim their fee.

Mike Haley, OFT Head of Consumer Protection, said:

'It remains the case that sellers who sign a 'sole agency' agreement with an estate agent could be liable to pay the agent their fee even if another estate agent ends up selling the property. This Court of Appeal decision helps house sellers and estate agents understand more about the circumstances where this might or might not be the case.'

Related News:

Foxtons To Be Sued By Hutcheon Solicitors


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