Home sellers are reporting agents to the Ombudsman because they do not understand the agreements they have entered into, even if they have read them thoroughly.
Christopher Hamer, in his second interim report for this year, says that consumers do not understand the differences between sole agency and sole selling rights, and that the phrase ‘ready, willing and able’ is open to interpretation.
The TPO Code of Practice for Residential Estate Agents requires agents to clearly explain and unambiguously state in writing the precise basis upon which a commission fee will be earned.
Specifically, agency agreements must use the definitions of sole agency, sole selling rights and ‘ready, willing and able’ as set out in the Estate Agents (Provision of Information) Regulations 1991.
However, Hamer said: “Many aspects of the disputes referred to me stem from sellers not understanding the terms of the agency agreement they have entered into and the point at which they become liable to pay the agent’s fee.
“Recently I have seen a number of disputes which have involved agreements where a ‘ready, willing and able’ basis has been employed but where the determination of the buyer’s status was not straightforward.
“It has to be clearly evident that a buyer is ‘ready’ to exchange (perhaps they have sold their own property and are therefore unencumbered), are ‘able’ (they should have funds readily available to pay the deposit required on exchange and be otherwise qualified financially to proceed) and are ‘willing’.
“However, there is plenty of room for interpretation within each of these three words, especially whether a buyer can be considered ‘willing’ when a transaction does not proceed to exchange.”
The second Interim Report of 2012 discusses the issues surrounding the use of ‘ready, willing and able’ clauses within agency agreements and provides a number of case studies which emphasise why an explanation of the commission fee earning terms must be given to the client at the point of signing in order to avoid future disputes arising.
The report says there are now 11,853 estate agents signed up to The Property Ombudsman (up from 11,693 in May) and 9,523 letting agents (up from 9,163).
Overall complaints about estate agents between May 1 and August 31 fell back to 1,419 compared with 1,572 for the same period last year. Lettings complaints, however, grew from 2,724 to 2,889.
https://www.tpos.co.uk/quarterly_report.htm
%20(002).png)
.png)
Comments
You will find that any seller who is tied-in to 26 weeks can cite the UTCCRs as this is considered to be too long. I appreciate they are only guidelines and not law, but agents are expected to follow them.
Any seller should not be tied-in for more than 13 weeks and the OFT did recommend this some time ago.
Half a year- you jokes! on 2012-10-04 12:47:54
" .... abhorrent restrictive terms, 26 weeks sole agency just is crap agency saying “We are such rubbish we need half a year to sell your property”
Half a year is par for the course in my corner of the country, and it's not agent-dependent; all manner of properties, from all manner of agents, still for sale after 6, 8 and 12 months.
If you're writing from anywhere near London, I'm sure you have a different situation where you are.
He would be better to look at agents that have abhorrent restrictive terms, 26 weeks sole agency just is crap agency saying “We are such rubbish we need half a year to sell your property”
Step forward disgraceful Countrywide and all other dreadful culprits!
"Ready, willing and able" is a traditional clause which has been added to many agreements for well over a century and the clause has been well tried and tested in the courts. Chris Hamer needs to sit down and wade through the All England law reports!
Contract Law, Ignorant vendors are equally liable to sign a contract with an intermediary as they are with a traditional EA. What is your point!
Thereby demonstrating his utter pointlessness.
How many people understand the basics of contract law let alone the subtle differences for property.
It is not the responsiblity of an Agent to the vendor to explain anything to the applicant.
This is an indication of the sort of mess created by ignorance that will result from Mr Cable's passive intermediaries.