Dual fees is a complex issue which this guide aims to make easy to understand. It explains how we review dual fee cases and the issues we consider when investigating a complaint. Each complaint is considered on a case-by-case basis and a decision does not set precedent.
This protocol is set out in a memorandum of understanding (MOU) between Property Redress and the Property Ombudsman (TPO), which you can find on the resources section of our website.
What are dual fees?
Dual fees happen when two estate agents believe they are entitled to commission fees on the sale of a property. This is usually because the seller instructs one agent in the first place to sell their property (often under sole selling agreement, but this can happen with any type of property transaction involving more than one agent).
This agent advertises the property and shows it to prospective buyers. For whatever reason, the seller decides to end their agreement with the first agent and instructs a second agent to sell their property (either under a sole selling agreement or a multiagency agreement).
The second agent markets and sets up viewings with prospective buyers. A prospective buyer who previously viewed the property with the first agent makes an offer through the second agent, which the seller accepts. The property sale completes, and the second agent receives their commission fees.
The first agent finds out that the property was sold to a buyer who originally viewed or showed some interest in the property through them, and they believe they are entitled to their fee now that the property has been sold.
What happens when the agents are members of different redress schemes?
As these complaints always involve two agents, either:
- both agents are Property Redress members, or
- one agent is a Property Redress member, and the other a TPO member
In these cases, we work in collaboration with TPO, to decide which agent is entitled to their commission on the sale, or whether the fee should be split.
Evidence received from both agents is:
- shared by the schemes for us to investigate and agree a resolution
- not shared with the other agent, to protect their confidential business information
If it becomes necessary for an agent to view another agent’s evidence, we will ask for permission first and ask the agent to redact any information they do not want another agent to view.
Both schemes will write and send a decision to their member, which confirms the jointly agreed resolution.
What evidence are the parties asked to provide?
All parties involved are expected to and responsible for providing evidence to support their position. The most important and relevant evidence will include:
- the agency agreement
- any other contract between the parties
- all communication between the seller and the agent
- all relevant communication between the agent and the buyer
- the list of interested buyers provided to the seller when they ended their contract with the first agent
- any evidence showing that the first agent made the seller aware of the possibility of dual fees
- the agent’s system notes, which usually show:
- a viewing list, including the names of the people who viewed the property and the date
- feedback from viewings
- contact logs
- system notes
- timeline of events
Decision-making
When we consider dual fee complaints raised by sellers, there are two main questions we consider when making a decision:
- Who introduced the buyer to the sale?
- Who placed the seller at risk of dual fees?
No consumer should be put at risk of paying dual fees. In these situations, agents are expected:
- to handle this between themselves
- to agree who should keep the fee or whether there should be a split
- not to involve a consumer when making this decision
- to take legal advice to explore their options for taking legal action against the other agent, where they are unable to agree
Agents can also use alternative dispute resolution methods, such as mediation. Property Redress offers a mediation service, which can help agents reach a decision. Contact details can be found on our website.
What guidance do we use?
When a case is being considered, we use a variety of resources when making a decision.
As we work in collaboration with TPO on dual fee cases, we consider their Guidance for TPO Members: Dual Fees
We also consider any relevant legislation and case law, which can include:
The critical question - who introduced the buyer to the sale?
It is not enough for an agent to introduce a buyer to the property. They must introduce the buyer to the purchase.
This means that a potential buyer who contacts an agent to ask questions about the property, or even to just view the property alone, will only be indicative of the agent introducing the buyer to the property, but not the purchase.
They must have viewed the property and, in an ideal situation, made an offer to purchase the property. This shows clear intention and active interest in the purchase.
This area is complex as it can be difficult to decide at which point the buyer was introduced to the purchase.
We would want to see that a viewing was booked, confirmed in writing to both the buyer and seller, and that it took place. A viewing which took place more than six months before the contract ended with that agent, with no continuity of interest, will not be viewed as an effective introduction.
All agents are expected to keep thorough written records of all communications between all parties, including any interested parties, and these should be provided to Property Redress when raising a complaint.
Our investigation and resolution will decide whether there is a link between the introduction and the purchase of the property to the buyer, showing the introduction as the ‘effective cause’ of the purchase.
How is a decision made?
To reach a resolution, we will consider:
- when did the viewing take place?
- how many viewings took place with the eventual buyer?
- was the buyer showing active interest, by asking questions and providing positive feedback?
- was the buyer in the financial position at the time to make the purchase? For example, did they have a mortgage in principle, and/or had the agent checked they had sufficient funds, if a cash buyer?
- whether the buyer’s interest extinguished at any point and then reignited at a later date and if so, what was the course of events?
- This is important as case law shows that the buyer needs to show active and continuing interest
- what was the timeline of events?
- This is important as proximity is a consideration
- Was there a gap in the timeline of events? For example, did the seller pursue another buyer, whose offer was accepted, but this later fell through? Did the buyer then make a new (later) offer a long time after their initial interest?
- were there any underhanded practices?
- For example, in Charania v Harbour Estates Ltd, the court found that the buyer had:
- shown a lot of interest in the property (viewing it four times with the agent)
- not expressed any negative comments
- intentionally waited until the seller ended their contract with the agent before placing an offer, and hoping to negotiate and get the best deal, thinking the seller would not pay commission
- The court found that despite there being a long gap between the original viewings and the offer, the seller was responsible for commission:
- as the buyer showed reasonable and active interest and
- the only reason he did not make an offer at that time was to try to negotiate on the price, based on the lack of a commission fee
Who placed the seller at risk of dual fees?
An agent should not place a consumer at risk of paying dual fees and should take the appropriate steps when they are dis-instructed/instructed, to limit this risk.
If, during our investigation, we find that an agent has not followed these steps, which we consider industry best practice – this will affect their entitlement to the fee.
Even if they introduced the buyer to the purchase of the property, they may forfeit their right to their commission in full, or we may decide that they are only entitled to part of their fee, to consider the service issues.
When the consumer withdraws their instruction
When a consumer ends their contract with the original agent, the agent should:
- provide the seller with a list of parties they believe they introduced (usually a list of people who viewed the property)
- highlight to the seller, in writing, the circumstances when they may be responsible for paying the agent commission, referring directly to the part of their contracts this relates to, and reiterate their responsibilities
This is to make sure the agent has provided all material information that a consumer can expect in this situation and makes the consumer fully aware of their responsibilities.
What happens when the consumer instructs a second agent?
This agent also has the responsibility not to place the consumer at risk of dual fees.
We expect a second agent to:
- confirm with the seller if they have previously instructed another agent to sell the property
- ask the seller for their contract with their previous agent, so they can check that the seller is not breaching the contract
- provide a written statement that they are unable to confirm if the seller is in breach of their contract with the first agent, if the seller is unable (or refuses) to provide this information
- ask the seller to provide the list of people who previously viewed the property (provided by their first agent). If the seller says they were not provided with this, they should ask the seller to contact their original agent for this information or the second agent can do this themselves
- highlight the risk, to the seller, of paying more than one commission fee on the property’s sale
- ask anyone who shows interest in the property whether they have previously viewed the property with the other agent
- refer the sale back to the first agent, if a potential buyer who viewed the property through the first agent, makes an offer through the second, and provide this information to all parties
Case studies
Each case is considered on its own evidence. For detailed case studies, read ‘Dual fees and poor service’ and ‘Dual fees and communication’ and see our website but here are some summaries of decisions we have made.
- Case one
- The buyer viewed the property with agent one and liked the property, but felt the price was too high. After the agency agreement ended with agent one and the seller instructed agent two, the buyer made an offer two days later
- The only reason why the buyer made an offer after agent two was instructed, and not to agent one, was the seller’s willingness to change their position and to accept a lower offer
- Agent one also provided the seller with an activity statement, showing the buyers that agent one believed they had introduced to the purchase, and they highlighted the possibility of the seller being responsible for dual fees
- Agent one was entitled to the full fee
- Case two
- Agent one’s property activity statement made no reference to the buyer
- Agent two was entitled to the fee in full
- Case three
- When the seller ended their contract with agent one, agent one provided no property activity list or any list showing viewings at the property to the seller
- Agent one also did not make the seller aware of the risk of paying dual fees
- The buyer was a neighbour and did not book a viewing through the agent
- The evidence suggested agent one considered the buyer a “nosey neighbour”. They neither took her interest seriously or considered her a ready, willing and able purchaser
- Agent one argued their advertising and sales board introduced the buyer to the purchase
- After the buyer went to the property to speak with the seller (during agent one’s instruction), no official viewing took place and no offer was made
- The seller accepted an offer from another potential buyer, which eventually fell through. This broke the chain of events. After this sale fell through, the buyer officially viewed the property through agent two and went on to purchase the property
- Agent two was entitled to their fee in full
