Would I Be Held Liable to Pay Commission to The Agent in This Situation?

frugal-fries on 24/02/2021 - 13:13

Hi Ozbargainers,

I'm in a bit of a pickle right now and wondering if I can get some general advice from your own personal experiences.

My partner and I are currently in the process of buying an off-the-plan apartment. We originally contacted an agent (Agent A) about a set of apartments we were interested in seeing. Agent A failed to respond back to us in a timely manner so we ended up contacting another agent (Agent B). We went with Agent B to view the display and the actual apartments.

Now, this is where things get tricky. Agent A also ended up responding via email, referring me to another agent in their company (Agent C). Agent C emailed me a few floor plans for properties we might be interested in (some in the same set of apartments). Agent C continued to call to ask more questions, but we did not go see the apartments with them.

We ended up putting in a deposit for one of these apartments with the Agent B. When we looked over the contract with our solicitor we noticed a line that states we agree "you have not been introduced to the property by anyone other than [Agent B's company]". After that it says we can otherwise be held liable to pay commission for any other agent.

Agent C is from a different company to Agent B. Because the lines of the contract are so vague (what exactly counts as being "introduced"?), we're afraid of signing the contract and being held liable to pay commission to Agent C, should they try to claim commission.

Additional info to note:
We also have reason to suspect Agent C may try to claim commission. Since telling them I have already gone to another agent and will buy through Agent B, they have asked me questions such as which apartment unit and whether the apartment would be under my name. I have not responded to these questions.

Furthermore, Agent C's emails did not include the actual apartment we are wanting to buy, but very similar apartments on the same floor with the same number of rooms, but different layout. I don't know if this makes a huge difference. If we're being specific, the contract states "the property", not "the apartments", so we were hoping that would rule out their chances of being successful should they attempt to claim commission.

Thanks in advance.

Home & Garden

Comments

  • Adredocto on 24/02/2021 - 13:23
    +9

    As always short answer is check with your solicitor who is the professional.

    As for the professional ozbargainer POV from the way you've described it sounds like agent C didn't do any work for you other than send some floor plans when you were already in talks with agent B.

    You also didn't purchase any of the ones they showed you. Seems you would have reached the same outcome without agent C's involvement.

    The agent may still push for a commission, I mean they are real estate agents, but whether they are entitled or you give any intention of following through is a diff matter.

  • Drakesy on 24/02/2021 - 13:40
    +7

    Yeah, you owe them nothing.

    Agent C did nothing for you other than send an email with plans, the fact that no one else has introduced you to the property other than Agent B should be enough to nullify the clause.

    If i got to charge per email i would've happily retired by now.

    RE agents are the nation's housing market Bin Chickens, fighting over scraps no matter how small. And should be treated with the lack of respect they deserve.
    Where else can you get a portion of someone's property for showing people through it, taking a few photos and posting on housing market gumtree.

    • Hardlyworkin on 24/02/2021 - 15:36

      Haha, it's a wonder there isn't an 'Ibis Real Estate'

    • poboy on 25/02/2021 - 10:47

      Agree. The poster introduced themselves to the property. The other agent didn't do any proactive introduction.

  • djkelly69 on 24/02/2021 - 13:58
    +1

    Doesn't sound like C has a claim to a commission, but I wouldn't risk it (or more to the point risk having to pay to fight it).

    The agent clause you have described is just a standard clause which goes in basically all contracts. Explain the situation to your solicitor and have them request the seller's solicitor amend the clause to prevent you being liable for any claim of commission from agents A or C.

  • onetwothreefour on 24/02/2021 - 14:02
    +2

    When we looked over the contract with our solicitor

    And what did the person you are paying a large sum of money to for legal advice tell you? (other than to contact Australia's foremost bargain hunting website, of course)

    • frugal-fries on 24/02/2021 - 14:09

      Our solicitor advised us to delete the clause (to be on the safe side), but the developer declined and the best they will do is offer an email saying we wouldnt be liable. Our solicitor said the email means nothing if it isn't in the contract. So now we're kind of at an impasse.

      • djkelly69 on 24/02/2021 - 14:25
        +1

        Don't ask for the whole clause to be deleted, just request a specific carve-out for agents A and C.

        • frugal-fries on 24/02/2021 - 14:46

          Yep, that's our solicitor's next plan of action. Fingers crossed they will allow this small amendment.

  • spackbace on 24/02/2021 - 14:33

    You could always talk to Agent B, and ask what he thinks? I mean, he'd see that happen often (and likely he's been on the same side as Agent A and C), and can offer you advice from that standpoint (may offer a sneaky way of getting out of it, etc etc).

    • frugal-fries on 24/02/2021 - 14:43

      We did actually have a talk with Agent B. They tried to convince us that there's nothing to worry about and that the developer wouldn't risk their reputation on such a small matter. They also said we would be protected by the law. Not sure how though…

      • JIMB0 on 24/02/2021 - 14:46
        +5

        They'd tell you anything just to get the sale. If you later got pursued for the other agents commission they wouldn't care as it would be on you. I'd be following your solicitors advice and getting it removed. You never know they could all be in cahoots to double dip on commision.

      • spackbace on 24/02/2021 - 14:50

        No worries, worth a shot!

  • TheBird on 24/02/2021 - 15:11
    +1

    You're fine.

    If the term "introduced to the property" has no definition or clarification in the contract, they have even less of a leg to stand on. When there are vaguenesses in contracts, the law tends to side with those who didn't prepare the contact.

  • Almost Banned on 24/02/2021 - 15:30

    In this country normally sellers pay commissions to real estate agents, not buyers.

  • twadds on 24/02/2021 - 15:42
    +1

    Did agent C send you floorplans of the specific apartment that you bought? If so there could be an issue, if they sent you floor plans or info of properties in the same building but a different apartment then they have absolutely no claim at all.

  • Meho2026 on 24/02/2021 - 15:45

    You need to talk to the agent in their own language which is lies and deceit.
    Respond to them and tell them youre purchasing the property through your SMSF and name a completely different apartment ghetto.

  • zathras on 24/02/2021 - 16:14
    +4

    Walk away. Not because of the mess with the agents, but because you are taking a big risk in buying an apartment off the plan.

    • RockyRaccoon on 24/02/2021 - 17:05

      EXACTLY.

      With apartment prices falling or at least remaining static why would you buy off the plan.

      If prices fall you are locked in.

      If they rise, the developer can run various tricks to increase the price. Change details of layout etc. Sure you can then pullout, after you do they sell it with the original plan.

      Thats all assuming .

      1. They dont phoenix
      2. They build to an acceptable standard - think Opal towers

      Lose Lose Lose

    • brad1-8tsi on 25/02/2021 - 08:49

      I couldn't agree more.

      A mate bought off-the-plan and it took 20 months longer to complete than was stated and it was full of faults. In the meantime he had to pay rent and also had to move. He even turned down an interstate job offer because he was committed to buying an apartment in Sydney that he couldn't sell because it wasn't complete.

  • Transient on 24/02/2021 - 19:42
    +2

    I find this strange. All the people I know that went apartment / house hunting as buyer never had to pay an agent commission. AFAIK, the agent was the seller's agent. Surprised that an agent would be taking comm from both seller and buyer!

    • brad1-8tsi on 25/02/2021 - 08:51
      +1

      Buyer doesn't pay commission. That's the seller. The developer would tell A & C to GGF.

    • djkelly69 on 25/02/2021 - 10:38
      +2

      The seller is still paying the agent's commission.

      This is just a fairly common ass-covering clause requiring the buyer to warrant that only the real estate agency noted on the contract was the one who introduced them to the property. The desired effect is that the buyer would be liable for the commission of any another agency if they were entitled to a commission as well.

  • frugal-fries on 28/02/2021 - 17:24
    +1

    Update: Thanks to everyone for the comments/help. Fortunately the developer's solicitor accepted our request to amend the clause to include Agent A and C's company too, otherwise we would have decided to back out of the contract to be safe. As a side note, although the apartment we are buying is off the plan, the unit we were looking at was already built so there was less risk as we knew exactly what we were getting.

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