A question that sometimes pops up is ‘can rental agents claim commission for a property sold if the tenant chooses to buy the property?’
He says in one or two of the cases he has been asked about, neither the landlord nor the tenant were aware of the rental agent sales commission clause in their agreement.
Bill Rawson, chairman of Rawson Properties, says often a tenant living in a property will grow so attached to it that he will offer to buy it or the owner might decide to sell the property, giving the tenant the first option. Also, if an owner dies, the heirs decide to sell and allow the tenant first option.
However, Rawson says there have recently been occasional cases where, on the sale taking place, the rental agent has claimed full commission on the sale.
Such claims, he says, are based on a clause inserted into the rental agreement which states unequivocally that, in the event of the tenant buying the property, the rental agent will be seen as having played the role of sales agent.
He says this clause remains effective even if the agent played no part in the sale process i.e. if the tenant dealt directly with the owner.
Rawson adds the contentious clause is found only in some rental agreements, not all. “My own view is that the rental agent is entitled to some compensation, but not on the same scale as a selling agent.”
He says in one or two of the cases he has been asked about, neither the landlord nor the tenant were aware of the rental agent sales commission clause in their agreement.
This means that if the Consumer Protection Act is called on, the clause could become invalid because the agent drawing up the rental agreement had not carried out his responsibility to explain the document fully to all those involved.
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"This means that if the Consumer Protection Act is called on, the clause could become invalid because the agent drawing up the rental agreement had not carried out his responsibility to explain the document fully to all those involved." I beg to differ on the above clause. Does this mean that the Consumer Act will super cede any and every clause between a tenant and land lord? It is the tenants duty to read and understand the lease. They sign it and acknowledge its terms and conditions. The same applies when signing a bond with the bank, or a cell phone contract. If this is the case, whats the point in having a signed lease if a tenant can plead ignorance to any clause in a lease ? - Wayne
Yet again the Consumer Protection Act is brought into the issue. Rawson of all people should be aware that the Consumer Protection Act is not applicable to Private Rentals in terms of the actual rental agreement between the two parties which is 99% of the cases and would therefore have absolutely no bearing on the transaction at all.The most worrying part is that the general public assume that someone like Bill Rawson understands these issues when he actually does not obviously! - Tony