In instructing an estate agent to sell or lease a property, the owner has the right to grant either exclusive or non-exclusive agency. If the owner chooses exclusive agency, he has to pay special attention to his liability under this form of agency appointment, and its validity period.
A few months ago, Ms Wong went to an estate agency, A Co, to list her flat for sale. When signing the estate agency agreement, she was persuaded by the agent to list the flat exclusively to the agency, effective for six months. That was to say, within the period of six months, A Co was the exclusive agent of Ms Wong for listing, advertising and introducing prospective buyers. If the flat was sold through another estate agent during the validity period of the estate agency agreement, A Co could demand commission from Ms Wong.
Ms Wong's flat was not yet sold two months after she had listed it with A Co. So she listed the flat with other agents and succeeded in selling it through B Co a month later. About a month after signing the provisional agreement for sale and purchase, Ms Wong received an invoice from A Co for commission. Ms Wong refused to pay the commission on the ground that A Co had failed to sell the property for her. Needless to say, the two sides had a long dispute on that.
Commission disputes arising from exclusive agency are not uncommon. In order to avoid the kind of disputes mentioned above, an estate agent, when signing an estate agency agreement with an owner, should explain to him in detail the meaning and the legal effect of exclusive agency. The owner, before having a clear idea of an agent's service, should consider carefully whether to list his property exclusively with the agent. If he chooses exclusive agency, its validity period should be clearly stated in the agreement, and the period should not be too long. Where an exclusive agency is granted, the owner must be clearly aware that he may have to pay the exclusive agent a commission even though the property is sold through another agent, as long as the sale is effected during the validity period.
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