Despite fairly considerable coverage in the media regarding the possibility of property sellers having to pay double commissions, instances still crop up regularly where the seller has found himself forced to do this. 

Property sellers need to be careful of using the services of more than one estate agent because they could end up having to pay double commission.

Lanice Steward, MD of Anne Porter Knight Frank, says The difficulty often stems from establishing who was the initial or effective cause of the sale and it has to be admitted that this may not be easy to define. 

Recently in a High Court case (Wakefields Real Estate vs Attree and Others), says Steward, the High Court gave one ruling which was then overruled by the appeal court. 

In this case, she says Wakefields took a potential buyer to a property which he liked but the agent was unable to conclude a deal because the buyer found the price too high. 

The mandate in time passed to another agency, whose staff persuaded the sellers to lower their price. Despite giving this agency a sole mandate, the seller also informed two other agencies of the reduced price, one of which, having met the original potential buyer elsewhere, and heard his opinion of the property for sale, contacted him again about the reduced price. 

This eventually resulted in a sale being concluded with the two later-appointed agencies sharing the commission. 

Wakefields, who had been the first to introduce the buyer to the property, took the seller to court, claiming that they were an effective cause of the deal. 

The High Court ruled that the “cumulative effect” of the second and third agencies’ actions far outweighed that of Wakefields’ initial efforts and dismissed Wakefields’ claim. However, the appeal court took the view that, but for the Wakefield involvement, the buyer might never have heard of the property. 

The seller was therefore instructed to pay out a second commission (at 6% plus VAT) to Wakefields. 

Steward says that some might argue that dropping the price was the effective cause of the sale and that the agency which achieved this was entitled to the sole reward – but, she adds that in all these cases the efforts of all agencies tend to be taken into account. 

“The moral of the story, therefore, is that the seller moving from one agency to another or employing several agencies had better get it set out in writing exactly how the commission splits will be treated.”

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