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House sale proceeds and estate agent fees?

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01 Aug 12 #346757 by SJRSJR
Topic started by SJRSJR
This is a mess. My partner and his ex owned their matrimonial home with a third party, a property developer who saw an opportunity to invest. However the marriage break up meant that the mortgage was no longer affordable and the house was recently sold at a loss. As the third party had put in most of the equity they agreed that the sale proceeds would go to him. However on the instruction of the third party and without my partner''s knowledge the conveyancing solicitor released the sales proceeds to him without paying the estate agent fees. The estate agent is now coming after my partner and his ex, because the third party was not named on the agency agreement.

I realise this may not strictly be a divorce issue but does anyone know if it is a hard and fast rule that estate agents fees must be deducted before proceeds are released? The solicitor is embarrassed about it and has asked the third party for the return of the fees but he has refused saying that he didn''t sign the contract and that he''s out of pocket due to the loss on the house. Where would it be set out that the solicitor pays the estate agent? My partner has no paperwork other than a letter from the estate agent to him and his ex setting out the fees.

Who should be suing who here? Estate agent sues solicitor? Estate agent sues partner and ex, and they sue solicitor? Or partner and ex sue third party? Thanks.

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02 Aug 12 #346868 by cookie2
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The estate agent has an agreement with your partner and his ex wife. Therefore they owe them the money and will have to pay. The estate agent does not have an agreement with the solicitor.

However your partner may be able to take action against the solicitor who made the mistake. This solicitor caused them to have a debt and has admitted being at fault, so he should reimburse them with the amount owed.

Maybe the solicitor can take action against the third party to recover the funds, who knows? But that is up to them.

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03 Aug 12 #347138 by SJRSJR
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Thank you.

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06 Aug 12 #347598 by .Charles
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The third party was paid the money in error and that money should be returned, by consent or by litigation. Eventually, the third party will have to pay up.

The solicitor caused the error and should reimburse the two instructing parties. Estate agents always raise an invoice as soon as contracts are exchanged so the solicitor will have received this invoice prior to the monies being released. A copy of the invoice will also have been sent directly to the instructing parties.

However, a copy of the completion statement should have been sent to the instructing parties prior to completion and release of monies. If the instructing parties failed to spot that estate agent''s fees were not in the statement, the position becomes less clear.

Charles

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