A BRITISH man is being sued by a local estate agency for commission on his property in Peyia even though he insists he ultimately sold his house through his own efforts.
Mike (who doesn’t want his last name used), a UK-based Briton who owned a three-bedroom house in Peyia, had originally decided to sell his property via BuySell Cyprus Real Estate. He told the Sunday Mail he signed an agency agreement with BuySell in October 2007, and the property was marketed at a price in Cypriot pounds equivalent to around €300,000. By mid-2008 the property had not sold, so he agreed to drop the asking price to €250,000.
By January this year, Mike’s property had still not sold, and he agreed to drop the asking price further to €225,000, also agreeing he would pay a fixed commission fee of €11,250 (five per cent of the asking price) plus VAT.
He said that on the morning of 10 February 2009, he received three emails within 20 minutes from Nicolas Tsifoutis, a listing executive with BuySell Cyprus Real Estate. He has provided the Sunday Mail with copies. The first email asked for a copy of his passport via fax or email.
The second said: “I have attached our new Agreement, this is a closed contract for 1 year but with the new price change, this property should sell quickly. Please sign and return the original via post so that we can start marketing your property at the new listing price.”
The third email said: “I attached the new Agreement, please sign and send us an initial copy via fax or e-mail so that we can make the necessary changes to the listing. We do however, require the original for our records.”
The agreement dated 10 January 2009, naming Supertrust Estate Agents Ltd as the agent, was signed by Tsifoutis on behalf of Supertrust and witnessed by Georgia Pyrkas. Mike signed the agreement and sent it back as requested, but without having his signature witnessed.
He said that he only realised later that the new agreement stipulated several new conditions regarding the agent’s fee, and maintains that the purpose of the new agreement was misrepresented to him: “They tricked me into signing a new agreement with the wording: ‘Please sign and return the original via post so that we can start marketing your property at the new listing price’.”
He had not been asked to sign a new contract when he had dropped the asking price for the first time, and freely admits that it was ill-advised to sign a legal document without reading it carefully or having it checked by a reliable lawyer. However, he argues that he had not been given any reason to believe that the basis of his original contractual relationship with BuySell had changed so fundamentally.
One clause of the new agreement, for instance, said that “if the property is sold to any person during the currency of this agreement (…) the seller acknowledges that the sale of the property was achieved as a result of the actions of the estate agent company.”
Mike told us that, due to the lack of results through BuySell/Supertrust, he took steps to market his property himself, and eventually sold it to a Greek Cypriot through his own efforts. Following advice from locals, he had a large banner made up advertising his property for sale and attached it to an upstairs balcony.
The Sunday Mail talked to the eventual buyer of the property, who preferred not to be named. He said that he saw the banner displayed on the property, dropped by and was shown around by the neighbours (to whom Mike had entrusted a key). He first made contact with Mike in April 2009, finalised the sale in June and completed it in July.
The buyer told us that he had no contact whatsoever with BuySell or Supertrust, and had not seen any printed or other material relating to the property that had been produced by BuySell or Supertrust. He added that he was prepared to testify in court to this effect.
Mike said that as the final sale of his property had had nothing to do with BuySell/Supertrust, he did not inform them that he had found his own buyer. However, BuySell/Supertrust appear to have found out by other means that the sale contract had been lodged with the Land Registry by the buyer.
He then learned that his Cypriot bank account had been blocked to the tune of some €15,000 and he was being sued by Supertrust for non-payment of the agency fee. He told us that the temporary court order putting a block on his funds included his bank account details, which he had not given to BuySell/Supertrust. He had, however, provided them with a copy of his passport.
When the Sunday Mail rang BuySell Cyprus’ main office to verify what Mike had told us, Tsifoutis refused to listen to any questions, never mind answer them, saying that “the agreement is what it is”, and we should ask a lawyer to explain it to us. He added: “Do you really think that I’d shoot myself in the foot? Do you really think that if I knew that what I was selling was shit, I would tell you?”
BuySell Cyprus was taken to court in September 2008 for operating as an estate agent without a licence by the Cyprus Real Estate Agents Registration Council (CREARC), a semi-governmental organisation which comes under the responsibility of the Interior Ministry. CREARC has a track-record of reporting and suing several real estate agents who operated without proper certification.
Mike has taken legal advice locally, and will be defending his case. What is at stake for both sides of the dispute is some €15,000 plus legal costs, since by bringing the case, Supertrust will also have had to post a guarantee for €15,000 with the court.
It should be pointed out that people in Mike’s current position would tend not to be Cypriot, as local practice is to sell property privately, using classified ads, banners displayed on the property, or just word-of-mouth. It would be a mistake for non-Cypriots to simply assume that an estate agent in Cyprus will provide the same level of service as an agent in their own country.
One wonders how many people, placed in the same position as Mike, would not have the determination or financial means to defend their position in court, and would simply pay the agent’s fee, whether or not they thought this had been earned.
The Agreement
The agreement which BuySell asked Mike to sign in February 2009 is a closely-typed one-page document containing 21 clauses. A number of these lay down the conditions under which Supertrust Estate Agents Ltd will receive a fee.
Clause 6 of the agreement says that “if the property is sold to any person during the currency of this agreement (…) the seller acknowledges that the sale of the property was achieved as a result of the actions of the estate agent company (…).”
Clause 10 says that the agreement “shall be valid for a period of one year from the date of its signing and shall be automatically renewed on an annual basis, each time for one more year. If either of the parties wishes the non-renewal of this agreement, either at the end of the first annual period or at the end of any annual renewal, then such party shall give the other party written notice, by registered mail or by email, of at least sixty days before the expiry of the relevant annual period.”
Clause 11: “For a period of 12 months after the termination and/or expiry of this agreement, if it is ascertained that the property has been sold by virtue of a sale and purchase agreement or that it has been transferred to any legal or natural person which has been introduced by the estate agent company and/or is a relative to the first degree with such a person, (…) then the estate agent company shall be entitled to its fee on first demand from the seller on the basis of the terms of this agreement.”
Clause 19: “Where possible each provision of this agreement shall be interpreted in such a manner so that is may be [sic] valid pursuant to applicable law, but if any provision of this agreement shall be considered invalid or shall be prohibited such invalidity or prohibition shall be interpreted in such a way so as to be assumed that such invalid or prohibited provision has not been included in this agreement (…). Both parties acknowledge that they have contributed, both in extent and in substance, to the drafting of this agreement, and consequently this agreement shall not be interpreted stricter as against one of the two contracting parties solely on the fact that it has been prepared by the lawyer for one of the parties.”
A Lawyer’s View
THE Sunday Mail asked an experienced lawyer specialising in property, who preferred not to be named, to review the agreement.
He said: “Whoever wrote this agreement has stacked everything in his favour; effectively, he is expecting the agent to be paid whether or not he actually does anything to sell the property.
I believe some of these clauses are excessive; for example clause 11, under which the agent expects a fee even if the property is sold 12 months after the agency agreement has been terminated or has expired.
The Abusive Clauses in Contracts Law 93(I)/1996 provides protection for consumers from excessive contractual clauses. Since in this case, the property seller is the consumer of the estate agent’s services, he could make a written complaint to the Competition and Consumer Protection Service (CCPS), which is a division of the Ministry for Commerce. If the CCPS decides the clauses are excessive, it can take the agency to court on its own authority.
I think that in such an instance, the seller will be successful, as the court will give its ruling based on the principle of consideration being due only for services rendered.”
How other agencies address the fee question
By Lucy Millett
TO investigate what one might expect when selling a property in Cyprus, the Sunday Mail made anonymous phone calls to various estate agents. This is what we discovered:
Sabbiano Properties: Three per cent commission. No sole agency agreement, and if the seller does decide to advertise through various different agencies there is ‘no problem’, provided Sabbiano receives its commission if it does find a buyer.
Investia Estate Agencies: Three per cent commission provided they are the sole agent. If the seller chooses to advertise through multiple agencies, the commission rises to five per cent.
Antonis Loizou and Associates: Three per cent commission + VAT. No sole agency agreement, but the seller is obliged to pay commission if Loizou and Associates introduces a buyer. An Authorisation Form must be signed before the selling process can begin.
Africanos Real Estates Ltd: Five per cent standard commission, negotiable to three per cent. They prefer to keep to the commission at five per cent because it “leaves more room for negotiation”. No sole agency agreement and the seller is only obliged to pay commission if a buyer is found.
Louis P. Constantinou Estates: five per cent minimum commission. The seller must sign a contract but there is no sole agency agreement.
Most of the agencies were very helpful. Some even went as far as discouraging selling property in the current economic climate. Only Investia Estate Agencies had a different agreement for sellers with multiple agents.
All agreed that the seller is only obliged to pay commission if the agent actually finds a buyer.
This information is based on phone calls made while posing as a potential seller. The Sunday Mail did not have access to the specific content of the forms and contracts of each agency and cannot comment on the possible small-print.
Copyright © Cyprus Mail 2009
Update
We have been given the opportunity to print BuySell management’s side of the story from Mr Demetris Demetriou, which you may read by clicking here.
