Developer after Agent

Hi Sirs
Good Evening,

In early 2005 I was an Agent and sold propertys on a new Development,
It was the usual scheme Euro 3k deposit followed by 15% 1st payment( our fee paid then ) and about a year later 15% for the 2nd payment, the rest on completion.
The Resort is not finished some of the Villa"s / Apartments are built and a Golf course but no advertised facilitys that were in the brochure some of which were medical centre , Golf Clubhouse , commercial centre ,Hotel etc,
Some of the Clients are in the process of taking the Developer to Court, I agree with them and have been helping them in their fight to seek compensation
The other day on Site the Sales person and what I now no as their Lawyer spoke with me and 2 Clients and said that they have everything in place and they would lose the case.
He then pulled me aside and said that they would come after me for the commision we were paid back in 2005 for all those that go to Litigation,
My question is can they do that, even though we think we have fullfilled our part of the Contract ?
Is it not so that once the 1st 15% was paid and by them paying us the fee all obligations were met and the only reason they are saying this ( we hope ) is to scare us away from helping our Clients,
We are a family run business and live and work here in Spain, while we no we will never sell another property for that Developer, we are thinking of our Clients interests and our own proffessional standing
Can you advise us please
Many thanks
Regards

Dear , Sirs ,

Good Evening

Can somebody from your firm answer this question please ?

We have a friend also in similar situation ( not sure same Developer )

Just seems a tad unfair if they start to chase Agents if they havent finished
the Resort as advertised and after over 2 years gone bye ?

Any info would be appreciated

Regards

Dear Sir or Madam,

I doubt they can pursue the estate agent.

An estate agent´s job is to sell property, period.

Once the client signs on the dotted line the agent has done his job. Depending on what has been agreed with the developer, payment of the commisssion may be paid upfront or else at completion.

It is not the fault of an estate agent, much less his responsibility, if a purchaser decides to pull out and not complete for whatever reason (i.e. unable to secure a mortgage loan). An agent has no control over this and can only do so much.

Again, I´m unaware of what you or your friend agreed in particular with this developer. Perhaps you could enlight me with the fine details.

Yours faithfully,
Raymundo LarraÃ*n Nesbitt

Hi Raymondo , many thanks for your kind reply to try to help us .

The Contract was signed on the 28th November 2005 between us and the Developer
SEA AND SUN PROJECTS S.L. B-73265712 ( We think they have stopped trading and are under another name )

Under FIVE-COMMISSIONS AND EXPENSES it states
5.1
The COMMISSIONAIRE (US) shall recieve a commsion equal to 7% of the sales price (net of tax) paid for each Housing Unit sold by the residential complex as a result of the COMMISSIONAIRES invlovement, provided that the final sale and public deed of puchase has been perfected.
5.1
The COMMISSIONAIRE shall not be entitled to anty commission if the sale of the Housing unit in which it acted as intermediary has not been fully concluded due to any circumstance.
In such an event any advances thar the COMMISSIONAIRE might have recieved on account of the transaction that had yet to be executed, must be immediately returned
to SEA AND SUN.

As you can see it states we would have to repay the commision but after such a long time
and the company knowing that for over a year I was helping my Clients ( its been 2 years over the said timr to finish)
7.1 CONTRACTUAL TERMINATION
Each of the parties too the Agreement may deem it to be terminated at any time. subject to the service of notice on the other Party at least 24 hours in advance,

Some of my Clients cannot now get a mortgage ,the others dont want to complete as the
Resort is over 2 years late and has not got the Facilitys that were promised in the marketing and Brochures, FYI some of the Apartments have been granted by the Town hall
the first occupation Licences,
It does state they can claim the commsions back but after four and half years is this still valid ?
Surely if this is true the Developer would never get any Agent to sell for them ?
They are using this to tell Clients they cant pay back the monies as the Agents have got it and most if not all are now closed, Seems a weal excude to me just not to pay out

Sorry Raymondo the post so long
Warmest regards

Dear Sir or Madam,

You´re welcome.

It woud seem you´ve signed a fairly harsh contract with this developer (almost one-sided).

I´m afraid that legally you would be obliged to refund the developer with the commission they forwarded you on account of the now failed conveyances.

To the best of my knowledge agents seldomly agree to such draconian clauses otherwise they could find themselves wasting an impressive amount of time and money during years on end only to find nothing to show for it, such as in your case. It really hinges on the clout of the agency. Large agencies cannot be bullied in as they bring in clients by the hundreds. But smaller players can be easily brushed aside with such biased clauses. Large agencies charged their commissions upfront on clients signing off plan contracts, they did not wait until completion (some three years later) to cash in. Hence the pressuring of some of them.

I take for granted this contract between yourselves is subject to the Spanish Jurisdiction. Because if it´s subject to UK law then you would need to seek the advice of a UK solicitor. Once signed it is binding for both parties. In Spain there´s freedom to agree on such clauses.

My advice would be to try to reach a middle point wherein you refund part, but not all, the amounts they are requesting on account of the years that have gone by, on you not being held accountable for the grim financial situation, on lenders not granting any longer a mortgage post credit crunch etc. Try to reach an amicable settlement avoiding litigation.

The truth be said you are in a weak position to bargain. Maybe you could endeavour to exploit the argument of lenders turning down mortgage applications of your clients. How can you posssibly be held accountable for such an unforeseen circumstance when it entirely escapes your control and that of your clients? Despite their willingness to complete their lenders are turning them down.

Good luck.

Best regards,
Raymundo LarraÃ*n Nesbitt

Hi Raymondo ,
Many thanks for coming so fast, not the answer we would have liked but none the less we can now decide our next action ,

My freind has actually closed his business some time ago due to lack of sales and credit crunch etc and the office is now shut etc

How does he stand in this now that the Company has closed ?

Thanks in advance

Regards

Why don't you PM me and I'll give you my e-mail. You will have to register first to access the PM facility.

You can then scan and e-mail me this contract so that I can review it free of compromise?

I'll revert back to you with the legal options available and then you or your friend decide what to do.

Yours faithfully,

Hi Raymondo ,


Most kind, thank you very much , the worry now is making us ill and we feel stuck as to what to do next ,

Please can you give us a while as we are off to the Uk for a short break

Again much appreciated for looking at our situation

Regards

Sure, you're welcome.

Regards