The Property Ombudsman should ban agents from using so-called exclusivity agreements on sales, claims a law firm.
Donal Blaney, founder of Griffin Law - which describes itself as “a niche litigation practice that gives expert advice to individuals and businesses who are involved in disputes of all kinds” - says the practice targets and exploits vulnerable buyers and should be probed by the Department of Levelling Up, Housing and Communities.
He says this was the issue with a family in London who are reported to have lost their holding deposit overseen by an agency.
The family who lost out thought they had found their chosen home when they viewed a four-bedroom townhouse.
The vendors asked them to sign an exclusivity agreement, meaning that in return for a £25,000 'holding fee’ the property would be reserved for four months.
If the sale was finalised by then, the deposit would be safe.
There is what one newspaper has called “a slight delay” on the buyers’ side, prompting the seller to seek a better offer.
Blaney says: "There's a reason estate agents are loathed even more than politicians. Exclusivity agreements are the preserve of shysters who prey on inexperienced or otherwise vulnerable buyers who are often desperate to move home.
“All too often they are a ruse to make a quick buck. It's high time they were outlawed and avaricious estate agents held to account for the misery they wreak.”
You can see a newspaper report of the original incident here.
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Reading the details, linked above, the family’s lawyers say “we always advise our clients to take independent advice” -bizarre: if they are THEIR clients presumably THEY are supposed to be advising them! Ten months and no exchange is more than a “slight delay” to the contracted 4 months so no surprise this couple lost their non-refundable deposit. The advice was needed BEFORE they signed it and if that was made a legal requirement it would ensure the fatally stupid only had themselves to blame and couldn’t whinge afterwards. With suitable advice and perhaps an upper limit in terms of % of price the arrangement seems rational and justified between informed adults.
Yes Isobel strange comment that doesn't tie in with the story; 'We do not pay or receive referral fees and always advise our clients to obtain independent advice.'
Shysters is a bit strong. There might be times when clients would benefit from entering into a well thought through and well drafted exclusivity agreement.
As always when an industry moves away from the traditional the old school can't cope and start slinging mud. This set up was intended as much to protect the seller from time wasters as the buyer from competition from other buyers. They would never have had a chance to secure the property otherwise in such a competitive market. If used properly by both sides with both entering into the agreement with their eyes open then I can't see the issue here. I would always insist that buyers take legal advice before entering into these types of agreements.These work well in the majority of cases and reduce fall through dramatically. Perhaps solicitors would prefer fall throughs to remain high despite the personal stress caused on both sides, as they appear to be the only ones that benefit when a sale falls through?.
There's a place for exclusivity agreements, but if we all had exchange ready packs when buying and selling (see EAT's Newsflash) they would be irrelevant!
If estate agents are viewed as worse than politicians by the public, I wonder where solicitors fall in the pecking order? Because every single encounter I've had with a solicitor has felt like an extreme rip off... a painfully slow one.
there are some good solicitors though so many have really struggled over the past 20/24 months.
Had one lie to a client yesterday....... (not a small lie quite a big whopper) we are just now helping the client get their ducks in a row to catch the offending solicitor out and then see whether that leads to a formal complaint or perhaps something more serious....
I fail to understand why Mr Blaney has had his opinion placed here as 'News'. This is a rant regarding an origin piece in the Daily Mail, where a buyer had made an offer, paid a 25k holding fee and agreeing to exchange in 4 months (they ended up taking 10). Whoever advised these people should be the one called a Shyster NOT agents. As for placing down a 25k fee and signing an exclusivity agreement oh dear!. next time speak to us at Gazeal.
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