Commission complaints: Performance by agency

One common area of dispute between property owners and real estate agencies is the issue of commission payments when a seller is dissatisfied with the agent's performance, particularly in terms of marketing. While sellers may feel justified in withholding payment due to their disappointment with the agent’s efforts, the law does not always support such actions.

Can a Seller Legally Refuse to Pay Commission?

In general, no, a seller cannot refuse to pay an agent’s commission simply because they are dissatisfied with the agent's marketing efforts. Even if the seller feels that the agent has underperformed in promoting the property, this alone is not considered a breach of the agency agreement. As long as the terms of the agency agreement have been met, commission is payable, regardless of subjective dissatisfaction.

For instance, sellers may feel unhappy that their agent did not directly introduce the eventual buyer, especially if the buyer was found through a campaign paid for by the seller. However, as long as the agent fulfilled their contractual obligations, the commission is still due.
Read more about this case here.

What Happens if Sellers Refuse to Pay Commission?

When sellers refuse to pay commission based on dissatisfaction with the agent’s marketing, the agent may pursue legal action to recover the commission. In one case, sellers tried to avoid paying commission, claiming the marketing was unsatisfactory and therefore did not justify payment. However, the court ruled in favor of the agent because no breach of the agency agreement had occurred.
Learn more about this case here.

Table: Key Points on Commission and Marketing Performance

Frequently Asked Questions

1. Can I terminate an agency agreement for poor marketing?
Not usually. A seller cannot terminate an agreement simply based on dissatisfaction with marketing. Termination typically requires a breach of contract or failure to meet specific terms outlined in the agreement.

2. What if the agent didn’t introduce the buyer directly?
As long as the agent’s marketing helped attract the buyer, even indirectly, they are still entitled to their commission. The key factor is whether the agent's efforts contributed to the sale.

3. Does paying for an advertising campaign give me grounds to withhold commission?
No, it does not. Even if the seller pays for the advertising campaign, the agent’s commission is still owed if the marketing helped sell the property.

4. What if I am genuinely unhappy with the agent's marketing efforts?
While you may feel disappointed with the agent’s performance, dissatisfaction alone is not enough to justify withholding commission unless there is a specific breach of contract.

Protecting Your Interests as a Seller

To avoid disputes, sellers should:

• Clarify expectations upfront with the agent regarding marketing strategies, timelines, and performance goals.
• Review the agency agreement thoroughly before signing, ensuring all terms are clear, especially regarding commission payments.
• Maintain communication with the agent throughout the marketing process to stay informed about progress and any challenges.

If you have concerns about your rights or obligations under an agency agreement, it’s important to seek legal advice to ensure that your interests are protected.