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Solicitor authorised to pay agent's commission

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Solicitor authorised to pay agent's commission

Postby theycantdothat » Tue Sep 27, 2016 1:06 pm

I do not know why, but the following question came to me as I was walking along the seafront yesterday:

An estate agent procures from a client a letter giving the client's solicitor irrevocable authority to pay the agent's commission out of the proceeds of sale. Does the letter create an obligation binding on the solicitor and enforceable by the agent to pay the commission when the sale is completed (assuming of course sufficient funds are available)?
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Re: Solicitor authorised to pay agent's commission

Postby atticus » Tue Sep 27, 2016 1:14 pm

No.

The solicitor is not a party to this agreement.

And I can see no reason why such an authority can not in fact be revoked, even if expressed to be irrevocable.

The agent's claim remains against the seller. If he really wants to make this stick, the agent should seek a suitable undertaking (which the solicitor might not be willing to give).
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Re: Solicitor authorised to pay agent's commission

Postby dls » Tue Sep 27, 2016 1:31 pm

I used to have the misfortune of dealing with a local agent who imposed this sort of term. I made it quite clear that I would always ignore it, and act on my client's instructions.
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Re: Solicitor authorised to pay agent's commission

Postby theycantdothat » Tue Sep 27, 2016 9:20 pm

Much as I thought, thank you. All it does then is save the solcitor having to ask for authority.
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Re: Solicitor authorised to pay agent's commission

Postby atticus » Tue Sep 27, 2016 9:59 pm

It would be wise to get it direct from the client.
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Re: Solicitor authorised to pay agent's commission

Postby diy » Wed Sep 28, 2016 8:47 am

I can see both sides to this..

On the one hand the agent may have experience of delayed payment due to funds not being released and uses this as a method to agree up front.. it may even avoid disputes if there have been multiple listings and agents. On the other, nobody really enjoys using the services of an estate agent, unless they were wildly off on their own valuation. Hence I imagine they suffer quite a bit from the "whore's dilemma" with clients less happy to pay after the service is delivered.

I assume a lot of firms get referrals from agents, I can imagine in a small town its essential for lawyer and agent to get along.
My suggestions are not legal advice
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Re: Solicitor authorised to pay agent's commission

Postby atticus » Wed Sep 28, 2016 8:54 am

Ask yourself to whom a solicitor owes duties. That should enable you to see that there is but one side to this.
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Re: Solicitor authorised to pay agent's commission

Postby diy » Wed Sep 28, 2016 2:11 pm

If only estate agents considered their duties in the same way.
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