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Estate agents under investigation for sole agency agreements

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  • 20/05/2015
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Estate agents under investigation for sole agency agreements
An online estate agent has lodged a complaint with the Competition and Markets Authority (CMA) about the excessive use of sole agency selling contracts among high street estate agents.

Russell Quirk, founder and CEO of online estate agent eMoov.co.uk, has lodged the complaint on the advice of a legal counsel.

As a result the CMA is investigating the practice, which Emoov said penalises UK sellers and creates a void between the customer needs and the agent’s service.

Sole agency agreements lock consumers in to a period of exclusivity, usually extending to as long as 20 weeks, but often continuing indefinitely until written notice to cancel is provided by the seller. Throughout this time, they are contractually prevented from instructing another agent to list their property regardless of the agent’s performance.

If they do breach the contract terms, consumers are then liable for penalty fees which can be up to 3% of the eventual sale price.

Quirk claims the lengthy periods of exclusivity are likely to breach a number of consumer protection agreements.

He said the nature of these agreements, coupled with a number of additional small print clauses, designed to further increase the agent’s monetary gain, is putting UK sellers at a severe disadvantage.

“These excessive periods of exclusivity, especially when taken together with the other restrictive clauses, are quite plainly not in line with consumer interests,” said Quirk.

The complaint lodged with the CMA is specifically aimed at the widespread and unfair use of excessive sole agency and selling right agreements, deployed by agents predominantly in the high street sector.

Emoov has requested the CMA investigate the use of excessive periods of exclusivity and their anti-consumer nature and act as they see fit. A change to sole agency agreement rules would create huge financial implications to the estate agency sector.

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