Fees row: Spotlight on Ombudsman after court case dec...

The couple at the centre of a court case about agents’ fees say the issue could have been resolved earlier had their complaint to The Property Ombudsman been upheld.

George and Hilary Wood, from Dorset, were taken to a county court by a firm acting for Palmer Snell, a Countrywide brand trading in Lyme Regis.

The Woods marketed their property initially through Palmer Snell, asking £575,000; amongst the interested prospective buyers was a couple who were not able to meet the vendors’ timetable.

The Woods terminated their deal with the Countrywide agency and then marketed their property with a rival agency - Fortnam, Smith and Banwell - at a lower £525,000 asking price; the same prospective buyers, whose circumstances had changed, expressed an interest in the Woods’ home again and went on to purchase it for £529,000.

However, Palmer Snell then sought payment of £7,935 in fees from the Woods, who rejected the request.

The couple went to The Property Ombudsman, which rejected their complaint.

The Woods were then issued with legal proceedings but at a court case earlier this month the Palmer Snell claim was dismissed, wth the judgement suggesting that the agent must prove it was the effective cause of the transaction - not merely an introduction.

The court judgement referred to a previous case, Foxtons Ltd v Bicknell & Anr, 2008, in the Court of Appeal where it was ruled that to claim a commission, the agent must have introduced the buyer to the purchase, rather than to the property.

In a note sent to Estate Agent Today, George Wood says: “We felt that the TPO decision was legally and morally wrong so in August 2016 we sought legal advice. We felt that as consumers it was wrong that we should be expected to pay two fees on the basis of a word introduction which was not clearly defined in the agent's contract.”

Later in his note, Wood goes on to say: “We would look to The Property Ombudsman to rectify this glaring anomaly. Who knows how many people may have been bullied into paying dual commissions when they didn't have to.”

Yesterday evening Jane Erskine, deputy ombudsman at The Property Ombudsman, told Estate Agent Today: “While we cannot comment on the details of a specific case or the reasons why the court came to their decision, not having seen a transcript of the case, TPO seeks to come to a decision on all cases referred to them having considered all the evidence.

“That is the terms of the contract, the agent’s obligations under the TPO Code of Practice and what is fair and reasonable in the circumstances.

“TPO continues to receive comment on the ‘Foxtons case’ concerning an agent’s entitlement to a commission fee. The cases that are brought to TPO reflect ongoing confusion, among both sellers and agents, as to what an agent is required to show to justify their commission fee entitlement.

“If an agent is basing their contractual entitlement to the fee on the fact that they introduced the buyer, the Ombudsman will expect to see documentary evidence that the agent was indeed the ‘effective’ cause of introduction.

“Merely handing property particulars to a prospective buyer, or conducting a viewing where the viewer expressed no interest in the property and did not, at that time, make an offer, will not be considered by the Ombudsman sufficient to establish that the agent’s actions resulted in the sale of the property.

“However, if the agent can provide detailed progress notes showing that the potential buyer was interested in the property and wanted to go ahead but was unable at the time, for whatever reason, but the agent kept in contact, trying to establish the sale, then it is likely that the Ombudsman may conclude that the agent was the effective introducer, even if that buyer subsequently made an offer through another agent.”