Estate Agents Beware. Don’t lose out on commission over a lack of contract.
18th September 2017 by Rob Kelly
There has been a case in court (Wells v Devani (2016) EWCA Civ 1106) that highlights the importance of ensuring you have a written contract in place with the seller of the property detailing your agreed commission and when you will receive it (the ‘trigger’) before the completion date, otherwise you may be in danger of walking away with nothing.
The case concerned a development in Hackney, which had some remaining unsold flats. The developer was introduced to an estate agent with whom the developer agreed a commission of 2% plus VAT during a telephone conversation, should he find a buyer. The new estate agent then introduced a housing association which made an offer to buy all the remaining flats. Following completion, the new estate agent submitted an invoice for £42,000 plus VAT in accordance with the agreement reached between them, however the developer refused to pay.
At first, the court held that although the parties had not agreed what would actually trigger a right to commission, a term could be implied that payment would be due “on the introduction of a person who actually completed the purchase”, however the developer took the case to appeal.
The Court of Appeal, by a majority of 2:1, overturned the original decision, stating that there was no binding contract detailing what triggered the entitlement to commission, meaning the agent was not entitled to commission when the flats were sold to a purchaser he had introduced.
From this, it is clear that parties should expressly agree all essential terms upfront in order to be certain that they will be able to enforce their contract against the other party.
If you would like further information on this case or advice on any dispute matters please contact Rob Kelly.
This article provides information and comments on legal issues and developments of interest. The contents of this article do not constitute legal advice, is not a comprehensive treatment of the subject matter covered, and should not be relied on as such. Legal advice should be sought about your specific circumstances before taking any action with respect to the matters discussed.
Questions relating to this article should be addressed directly to the author.
Rob Kelly
Senior Associate Solicitor — Dispute Resolution
Direct dial: 01202 377871
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Rob practices in two main, complimentary areas of work – contentious wills, probate and trust disputes, and property disputes.
Contentious wills, probate and trusts
More than half of Rob’s time is spent dealing with the contentious aspects of wills, probate and trusts, an area in which he has practiced continuously for over 20 years. He advises and acts in disputes relating to wills and inheritance, trusts, the duties of trustees and personal representatives, and the administration of estate.
Rob’s practice embraces:
- Personal representative and trustee disputes (including personal representative and trustee disagreements, removals / substitutions and alleged misconduct)
- Disappointed beneficiary claims
- Will disputes (where the validity of a will is challenged on the grounds of undue influence, lack of testamentary capacity, lack of knowledge and approval of the contents of a will, and fraudulent calumny)
- Financial provision claims under the Inheritance (Provision for Family and Dependants) Act 1975
- Proprietary estoppel claims
- Disputes about the proper construction, and rectification, of wills
- Caveats
- Professional liability claims arising from the preparation of wills and trusts and the administration of estates
He has mediated (either as appointed mediator or as a representative) dozens of disputes involving contentious wills and probate issues.
Property disputes
The other side of Rob’s practice is contentious property work. This embraces:
- Residential and commercial landlord and tenant disputes
- Disrepairs
- Repairing covenants
- Possession claims
- Lease termination and lease forfeiture
- Dilapidations
- Service charge disputes
- Interpretation and enforcement of leasehold covenants
Rob’s style is a mix of listening, asking (tough) questions, diplomacy and reality testing. He’s interested, flexible, and pragmatic. He offers a common sense, realistic approach to assist his clients in searching for solutions to their disputes and brings straight talking and integrity to his work.
Rob is a Solicitor. He successfully completed training as a mediator under the ADR Chambers / Harvard Law Project Scheme in June 2006 and is a member of the Civil Mediation Council.
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