Ombudsman To Issue Guidance Over Agents’ Dual Fees

With growing numbers of home sellers complaining to The Property Ombudsman (TPO) over dual fees means there will be new guidance issued to estate agents to resolve future problems.

The issue of dual fees is when someone selling their home has to pay both their first estate agent as well as a second one should they sign up with another firm to sell their property.

The Property Ombudsman has revealed that it received more than 50 complaints last year over dual fees, and 32 complaints in 2017.

The problem with dual commission could be prevented if the situation was made more transparent to vendors, the TPO says, and home sellers should be informed at every stage of the process, particularly when dual fees could become due when using a second estate agent.

The issue was discussed at an industry and consumer forum held last October and was reported this week by TPO, who say the forums were arranged to discuss those issues which could result in “consumer detriment”.

Issue of dual fees has been highlighted

The issue of dual fees has been highlighted in a report by investigator Alison Farrar , who works for the industry regulator, the National Trading Standards Estate Agency Team (NTSEAT).

The report states: “It was agreed that transparency at every stage of the process to the seller is required and agents should highlight circumstances where dual fees could become due should a seller decide to use a second estate agent.”

The report makes clear that one of the issues is the level of detail in contracts used by estate agents and that many consumers are failing to read and understand the information.

It’s now proposed that a potential solution is to highlight all of the essential information needed by a vendor on page one of their contract, including where the seller may be liable for the dual fee.

Now, the TPO is proposing to undertake further work and provide clear guidance and offer case study examples to help vendors understand the situation.

Adjudication on a dual fee dispute

The announcement follows the Property Ombudsman, Katrine Sporle’s recent adjudication on a dual fee dispute between two firms of estate agents.

In her adjudication, she explained: “Agents should take steps to ensure the seller understands the risks when they either disinstruct one agent and when instructing another and they should adhere to the relevant parts of the TPO’s code of practice.

“This will ensure the seller is equipped to make decisions when agreeing on a sale and when a dual fee situation arises, sometimes through no fault of the agent, I expect the agents to negotiate a split so no seller faces a dual fee payment where the seller is ‘innocent’.”