Estate agent fees..legal issue

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25 Oct 2015 11:26 AM by floella Star rating in SE Spain. 789 posts Send private message

The sale of a friends house here has just fallen through.

The purchaser gave agent a 10% deposit and he gave the vendors all but €3,000 of it. Now agent says the vendors owe him the balance of his enormous fee.  Dont think my friends ever read the contract with the agent before handing everything over to their solicitor who now says they will have to pay as, according to Spanish law, the agent technically sold the property.

 Anyone know if this is fact. Hopefully Maria will see this post and also respond.

 

 





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25 Oct 2015 3:03 PM by Tadd1966 Star rating in Los Montesinos. 1755 posts Send private message

Floella 

 The agent may have found a buyer but as the sale has not gone through how can it be sold? 

If this is the case then this would be easy money for any of the many crooked cheating dishonest estate agents in Spain

Go and see another solicitor 



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“The greatest enemy of knowledge is not ignorance; it is the illusion of knowledge”



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25 Oct 2015 3:57 PM by floella Star rating in SE Spain. 789 posts Send private message

Exactly how I think Tadd which is why I posted it on here. 

In UK solicitor holds deposit and if sale falls through REA gets zilch and as as in this case the agents put house back on the market.  As it is the agent has already taken €3000 from the deposit against costs which I find totally out of order.

However haven't seen the contract so only imparting verbal info according to our friends' legal bod.

But it gets worse.

Also in the contract, apparently, was a get out clause for the buyer whose deposit would be repayable if a mortgage couldn't be arranged. Lawyer said buyer wasn't requiring a mortgage!

My question is how would our friends lawyer know and if true why was this clause inserted.

The agent and lawyer, both English, are in different towns so hopefully don't know one another. But believe REA and buyer are more than business acquaintances.

So, friends have to pay fees to agent who hasn't actually sold the property and buyer could then request return of deposit.....what a scenario.

I cannot believe that this is normal practise or indeed legal.  If it is then everyone beware.

 

 

 





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25 Oct 2015 4:09 PM by Tadd1966 Star rating in Los Montesinos. 1755 posts Send private message

Floella

All sounds a bit dodgy and ceratinly unfair for the seller

Maybe name and shame the agents and the lawyers so others can avoid

 



_______________________
“The greatest enemy of knowledge is not ignorance; it is the illusion of knowledge”



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25 Oct 2015 4:37 PM by floella Star rating in SE Spain. 789 posts Send private message

The whole scenario has been fraught with problems but try explaining your concerns to an elderly couple whose brains became frazzled  at the thought of finally returning to UK.

If all else fails then name and shame might be on the cards.

 





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25 Oct 2015 10:23 PM by Sanders Star rating in Madrid. 6 posts Send private message

Surely the question is why the sale fell through. Who is at fault, as that will determine who gets the deposit. If the seller refused to sell, that is one thing, and the agent should not be out of pocket, as they have provided a buyer, plus the vendor has to pay back double the deposit. 

If the buyer declined to proceed, that is distinctly different, and they should forfeit the deposit. In this instance, since there is no sale, there is no commission to pay. 





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25 Oct 2015 11:13 PM by floella Star rating in SE Spain. 789 posts Send private message

Sanders, Spanish law as I understand it states if, after a deposit has been paid, vendor pulls out the buyer is paid double their deposit and so understandable the REA shouldnt lose out.  

But this is obviously not the case as I previously stated the REA has put property back on the market so see no reason why he is entitled to more of his fee than he has already taken.

However in this case the buyer pulled the plug so loses deposit.

Although sale was agreed about 5 months ago, with buyer successfully  negotiating rock bottom prices for furnishing, he has been stalling in finalising the date at the notary and with less than a month to go informed REA he wouldn't be proceeding.  No reasons given.

What I am wanting to know is does the REA have a legal right to demand full payment or indeed to have taken any money before going to the notary.





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26 Oct 2015 11:57 AM by mariadecastro Star rating in Algeciras (Cadiz). 9354 posts Send private message

Legal Questions? Speak to Maria Direct

Floella: Please ask your friend to send to me the deposit contract he signed so I can take a look and appraise the situation

 



_______________________

Maria L. de Castro, JD, MA

Lawyer

Director www.costaluzlawyers.es

El blog de Maria



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26 Oct 2015 5:12 PM by floella Star rating in SE Spain. 789 posts Send private message

Thanks for your offer of help, Maria. 

However have just been in contact with my elderly friend who will neither permit me  to see a copy of the contract nor send to you.

According to her lawyer, because they signed the REA's contract which was worded in such a way as this 

" when a deposit is accepted it is technically assumed the property is sold thereby the vendor is liable to pay all fees due. "..... they are committed to do so.

Legal or not, cannot believe that this is how any ethical REA would act. But there is certainly one such REA in a popular Brit costal town in Almeria who has no compunction but to do so.

So sellers beware and don't sign any contract with a REA until you have discussed it with a lawyer.





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26 Oct 2015 7:54 PM by ads Star rating. 4039 posts Send private message

Might this be an illegal contract clause or is this the norm when reselling property through an agent in Spain?





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26 Oct 2015 8:32 PM by floella Star rating in SE Spain. 789 posts Send private message

Interesting point Ads.

Has anyone who has sold had a REA insert this clause in their contract.  Also when did your REA get his commission ? Was it at the notary or before.

 





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27 Oct 2015 8:45 AM by Hephaestus Star rating in The Peak District Na.... 1235 posts Send private message

If the lady in question has decided not to hand over a copy of the contract, which is her right, then all comment on this thread regarding it's legality is pure supposition. 



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27 Oct 2015 8:49 AM by inspectahomespain Star rating in Orihuela Costa, Spai.... 2417 posts Send private message

Vip Supporter

Unlike the UK in Spain, when the buyer signs a purchase contract, which is agreed by the lawyer, who has been retained by the buyer and pays a deposit which is normally between €3k & €6k, then that is a legal agreement between the buyer, seller and the agent that is acting for the seller

Key here is what is in the sales contract, which nobody can see and the advise and service that is being provided by the buyers lawyers, who are being paid to advise the buyers

If the buyer requires a mortgage then typically we would NEVER advise the buyer to sign any contract until they have been accepted in principle for the mortgage and that a clause if required is added to the purchase contract that would allow for cancellationand refund of deposit, if they could not obtain a mortgage on that specific property

I am confused because also you talk about their being a mortgage clause then that no reason has been given for not completing, a sales contract will normally always contain an agreed completion date

The contract will also should specifiy an agreed completion date and terms of payment for the balance which normally happens at The Notary and which is where often the ageny will take their fee

The lawyer is correct in saying that once the contract is signed by the buyer and the deposit paid, that the property is sold and that any fees, specified in the sales contract and the contract signed by the seller with the agent are due, they have done their job, listed, viewed and sold the property and the REA is not tying to rip anybody off and simply wants to be paid for the work that they have done, it isn't their fault

Now certainly the vendor shouldn't loose out as clearly it should be the buyer that has messed around for the last 5 months that pays the bills but not all REA have this clause in their contracts

In this case the seller had their own lawyer, the buyers hopefully had a different independant lawyer and contract law in Spain is very good and specific in that if the buyer pulls out they still have to pay nt only the deposit plus a penalty for not completing and it isn't the REA trying to be dishonest or cheating anybody, simply being paid as per the contract for the work that they have done

I do not elieve that you are getting the full story here from your friend, especially if they won't share details of the contract and when both lawyers would have t agree the contents and clauses

 

 

 



_______________________
Roy Howitt Independent Property Consultant www.sonrisaproperties.com www.snaggingspain.com WE CAN FIND YOUR DREAM HOME 627 955 748



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27 Oct 2015 9:43 AM by floella Star rating in SE Spain. 789 posts Send private message

Totally agree inspectahomespain.

The truth of all of this is just dribbling out and without seeing the contract no-one can advise however on what has occurred. Supposition, or not,  this scenario can hopefully help other vendors from getting into this predicament.

Sign nothing  without taking legal advice.

Wondering , are the contracts for buyer and seller, standard or individually worded because both the REA and sellers lawyer have stated, apparently, buyer verbally mentioning they didn't require a mortgage although clause was in contract. . I would question how would anyone know if this is true or not. 

Contract did specify a completion date which the buyer appeared to believe was not important but once pressed to comply suddenly pulled the plug. 

I cannot believe anyone is willing to lose €25 k and just walk away whilst the professionals involved in this debarcle are requiring payments on contracts to be observed without delay.

What ever the right and wrongs, legal or ethnic,  are in this scenario cannot help but be concerned and fear this elderly couple could be put under pressure to repay deposit or reduce house price by said amount.

Hopefully I am totally wrong but something just doesn't add up.

 

 

 

 





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27 Oct 2015 12:50 PM by mariadecastro Star rating in Algeciras (Cadiz). 9354 posts Send private message

Legal Questions? Speak to Maria Direct

I need to see the wording of the contract as every case is totally different.

Consumers Law of course applied here so balance and proportion principles to be taken into account.



_______________________

Maria L. de Castro, JD, MA

Lawyer

Director www.costaluzlawyers.es

El blog de Maria



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27 Oct 2015 2:10 PM by floella Star rating in SE Spain. 789 posts Send private message

Totally agree Maria, however this elderly couple have refused to  let anyone other than their lawyer see the contract, which is a great pity. 

Today, less than a week after buyers pulled out, they paid the agent their commission in full admitting to me they felt intimidated to do so  and have also allowed him to remarket the property.

For once in my life I am at a loss for words angry

 

 

 





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27 Oct 2015 4:03 PM by baz1946 Star rating. 2259 posts Send private message

Today, less than a week after buyers pulled out, they paid the agent their commission in full admitting to me they felt intimidated to do so  and have also allowed him to remarket the property.

So if anyone now says being an Estate Agent in Spain is a rubbish job they should think again....He sold it once, sale went bottoms up, he gets paid, he sells it again sale goes bottoms up, he gets paid.

Bet a dollar they didn't even alter the agreement to suit them.





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27 Oct 2015 4:49 PM by GuyT Star rating. 501 posts Send private message

I'm a confused. We were told "The purchaser gave agent a 10% deposit and he gave the vendors all but €3,000 of it." Floella implies that the deposit was $25k. (I cannot believe anyone is willing to lose €25 k and just walk away)

The estate agent's commission is unlikely to exceed €25k, surely?. As someone said, the estate agent has done his job and is entitled to take his whack out of the deposit. But what is there to "fear" for the vendors? A house sale fell through; they still get to trouser the remainder of the deposit. And keep their house. We should all be so lucky.

I was always advised by lawyers (not in Spain, admittedly) to write in the words "Agent's commission is due and payable on transfer of title". That avoids all this bickering.





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27 Oct 2015 5:21 PM by inspectahomespain Star rating in Orihuela Costa, Spai.... 2417 posts Send private message

Vip Supporter

baz1946 here we go again, the agent marketed and sold the property so did his job for hich he is entitled to be paid in the same way as anybody that successfully does a job is surey entitled to be paid and the vendor should not be out of pocket and the buyer fits the bill,after all staff, cars, offices, marketing etc costs money and of course ters are no sale no fee

I am certaun that if anybody on here did an agreed job for a price and didn'tt get paid that they would not be happy

If the agent is any good then perhaps he is the best person to sell the property again, he has done it once already



_______________________
Roy Howitt Independent Property Consultant www.sonrisaproperties.com www.snaggingspain.com WE CAN FIND YOUR DREAM HOME 627 955 748



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27 Oct 2015 5:33 PM by baz1946 Star rating. 2259 posts Send private message

 

baz1946 here we go again, the agent marketed and sold the property so did his job for hich he is entitled to be paid in the same way as anybody that successfully does a job is surey entitled to be paid and the vendor should not be out of pocket and the buyer fits the bill,after all staff, cars, offices, marketing etc costs money and of course ters are no sale no fee

I am certaun that if anybody on here did an agreed job for a price and didn'tt get paid that they would not be happy

If the agent is any good then perhaps he is the best person to sell the property again, he has done it once already

So who's disagreeing with the way the Estate Agents work or get paid or word the agreements, certainly I didn't, I just made a comment on sold once, falls through, gets paid, sells it again, falls through, gets paid again....Good business if you ask me....

Certainly not knocking the way Estate Agents work, why should I ? Daughter owns one, plus a letting agency.





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