What happen to the sale if I fire my agent? Part 3 of 3.
Take for example, a booking fee (earnest deposit) is given by a prospect – tenant/purchaser. The vendor terminates his Agent X. He subsequently can do two things:
He appoints another agent – Agent Y. This new Agent takes over; or
He himself as landlord/owner takes over. This is bad faith, but legally nothing wrong.
The booking fee is handed over to Agent Y/owner. The Agent Y/owner resume the duty of selling/letting. Thereafter, the prospect purchaser obtains bank loan guarantee letter and come to an unconditional sale & purchase agreement with the help of Agent Y/owner.
At completion (signified with signing of SPA or signing of tenancy agreement) Agent Y gets his fee of estate agency for work done (maximum of 3% of transacted price if it was a sale). On the other hand, when owner himself completed the work – he saves his fees. However, agents X gets 50% of the fees originally engaged with the vendor/owner (see Part 2 or 3).
The rights of purchaser (who already put a booking fee with Agent X) is protected by the fact that agency contract was in force, and according to S.157 CA50, a principal cannot revoke the authority given to his agent X after the authority has been partly exercised – ie the collection of booking fee.
If there was no booking fee collected, there was no work done. Hence, there is no fee outstanding according to the MEAS 2014.