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Q We rented out a flat in 2005 using a well-known national letting agency. The agent was paid a fee for finding the tenant under its standard terms and conditions for letting properties.
Last year we sold the flat to the sitting tenant without using an agent. However, the letting agent invoked the terms of the letting agreement and we had to pay £14,000 in sales commission on the basis that the tenant had bought the property. Is there anything we can do to get our money back?
A Brief encounter is receiving a lot of questions about estate agents' fees. It seems that the credit crunch has forced many agents to comb through the small print of agreements with their clients in order to earn a crust.
There are several cases going through the courts, or that have been decided recently, that deal with estate agents' commission.
This year, in the case of Foxtons Ltd v Pelkey Bicknell, the Court of Appeal reaffirmed the principle that it is not enough for an agent to introduce a purchaser to earn a sales commission. The agent has to be the effective cause of the sale.
The Office of Fair Trading (OFT) is also challenging, in the High Court, Foxtons' standard terms and conditions for letting properties. The OFT believes that the Unfair Terms in Consumer Contract Regulations 1999 mean that some charges made by the agent are unlawful.
The case mainly involves the right to claim a second fee from the landlord if a tenant renews at end of the original letting period. However, the challenge also covers commissions payable where a sitting tenant buys the property (as in your case). Foxtons recently won a preliminary hearing in this litigation, and the outcome of the trial and any appeals may not be known for some time.
I am aware that solicitors in Cheshire have already issued county court claims by landlords for repayment of fees paid to agents in similar circumstances.
You can issue proceedings for repayment (or “restitution”) of any moneys that you have paid unlawfully on these grounds and claim interest from the agent as well. You do not have to do this right away, and it may be better to wait until the result of the OFT case is known. Under the Limitation Act 1980 you have up to six years to issue any claim in court.
The writer is a barrister at Tanfield Chambers. E-mail your questions to: brief.encounter@thetimes.co.uk
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