Landmark property case puts spotlight on contractual small print

A legal case stemming from the sale of a £1.8m property has highlighted the “serious risks” property sellers could face unless they fully examine in detail their contracts with local agents.

In a landmark case for Gibraltar, a couple selling their property were ordered to pay a commission to an estate agent that had marketed their home, even though the sale was ultimately closed through another agent which had also received a fee for its work.

In effect, the sellers ended up having to pay a double commission on the sale.

Supreme Court judge Christopher Butler stressed that neither the estate agent nor the sellers were being criticised for their handling of the case, given that both believed they were acting properly.

He said the case was unusual and that nothing in his judgement should be taken as a reflection on the ethical standards of estate agents in Gibraltar.

But he indicated that particular clauses of the Code of Conduct governing estate agents “merit some reconsideration” and that “more detailed guidance for agents” would be welcome.

“It seems to me that openness in commercial dealings is generally to be encouraged and that clearer guidance would help to ensure that repetition of a situation such as has arisen in this case can be avoided,” Mr Justice Butler said in a judgement stemming from the case and published last week.

Mr Justice Butler awarded a judgement for £36,500 – the equivalent of a two per cent commission on the sale price of the property in question, which attracted the eventual buyer of a residential property but went unpaid when the buyer ultimately opted to complete the transaction through a rival agent.

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