VIC Real Estate Agents - Exclusive Sale Commission Payable?

[Michael Boyle]

Hi Guys. I have a question regarding real estate agents sales commission.

We signed an exclusive sale authority last month with a real estate agent and the agreement expired this week as the agent was unable to sell the property. We gave a written notice to the agent to terminate their services as we don't want to have continuing authority with them.

Now, someone knocked on our door today, had a thorough inspection and made an offer which are quite keen to consider.

Can you please advise if the agent's commission is payable in this instance?

 

[Tim W]

So, the agency agreement expires....
Next minute, there's a punter on the doorstep.

Seems quite the co-incidence, doesn't it?

 

[Michael Boyle]

Well hard to say...this is the real dilemma we are in and unfortunately our conveyancer will not advise on this aspect. Would appreciate your response as far as the law is concerned.

 

[Tim W]

The "Authority To Sell" (as it's called in Victoria) should contain both dates of effect and
describe the circumstances in which a commission is payable.
Check the wording carefully, as it may contain clauses for
inferable or de facto extension of the Authority.
This is especially the case if the agent is not using the REIV generic documents.

While I defer to the Victorian lawyers among us for detailed commentary,
I imagine that it will turn on one or more of these four things:

1. Whether or not the would-be buyers found you through that agent*,
   during the time in which the agent held the Authority; and/or
   
   
2. Whether or not your agency agreement was in effect
   at the time the would-be buyer first made contact with the agent**; and/or
   
   
3. Whether or not there was, after the end of the exclusive agency agreement,
   some kind of non-exclusive agreement in place****; and/or
   
   
4. Whether or not item 1 above occurred during any non-exclusive period.

You may find it prudent to "set aside" an amount of money from the sale
which you could use to pay the former agent, in the event that (s)he has
a valid ground on which you should indeed pay her/him.

Do not worry at all about your conveyancer not helping you.
Such questions are well and truly outside their scope of practice.


-------------------------------------------
* As distinct from, say, finding you on a general web search.
*** That the agreement may have subsequently expired is irrelevant
**** Either expressly, or reasonably able to be inferred as. flowing-on from the expired one. They may try to say that there is. Your instructions ending the agency may make that claim difficult to support.

 

[Michael Boyle]

The "Authority To Sell" (as it's called in Victoria) should contain both dates of effect and
describe the circumstances in which a commission is payable.
Check the wording carefully, as it may contain clauses for
inferable or de facto extension of the Authority.
This is especially the case if the agent is not using the REIV generic documents.

While I defer to the Victorian lawyers among us for detailed commentary,
I imagine that it will turn on one or more of these four things:

1. Whether or not the would-be buyers found you through that agent*,
   during the time in which the agent held the Authority; and/or
   
   
2. Whether or not your agency agreement was in effect
   at the time the would-be buyer first made contact with the agent**; and/or
   
   
3. Whether or not there was, after the end of the exclusive agency agreement,
   some kind of non-exclusive agreement in place****; and/or
   
   
4. Whether or not item 1 above occurred during any non-exclusive period.

You may find it prudent to "set aside" an amount of money from the sale
which you could use to pay the former agent, in the event that (s)he has
a valid ground on which you should indeed pay her/him.

Do not worry at all about your conveyancer not helping you.
Such questions are well and truly outside their scope of practice.


-------------------------------------------
* As distinct from, say, finding you on a general web search.
*** That the agreement may have subsequently expired is irrelevant
**** Either expressly, or reasonably able to be inferred as. flowing-on from the expired one. They may try to say that there is. Your instructions ending the agency may make that claim difficult to support.

Thanks Tim for your detailed response.