Estate Agency Fees and Snagging Delays

Issue

The customer complained that the developer was unclear about the scheme under which estate agency fees were paid, as they were deducted from potential cash incentives rather than paid upfront. They also raised concerns about multiple property issues, significant delays in resolving them, and poor complaint handling by the developer throughout the process.

Circumstances

• The customer entered a part-exchange agreement confirming the developer would cover estate agency fees upon legal completion of their existing home’s sale. 
• When reserving the new property, the customer accepted an incentive package that included a £6,336 estate agency fee and other contributions under the scheme’s terms and conditions. 
• The customer later complained that the developer had not clearly explained that the fees would be deducted from the total incentive amount, rather than paid separately in full. They felt this lack of clarity led to receiving a smaller incentive than expected. 
• After legal completion, the customer reported multiple property issues, including defects previously identified during the developer’s own inspection. 
• Despite ongoing remedial work, the customer raised concerns about delays, poor communication, and inadequate complaint handling, escalating the matter to the Ombudsman later that year. 
• The developer apologised for delays, citing contractor and material constraints, and stated that all valid defects were addressed through remediation or financial offers. They maintained that the customer received over 5% in total incentives.

Ombudsman’s decision

After reviewing the part-exchange application and Reservation Agreement, the Ombudsman concluded that the customer was reasonably aware that the developer would cover £6,336 in estate agency fees as part of the agreed incentive. There was no evidence of incorrect deductions or misleading information. This part of the complaint is not upheld. 

On snags and defects, the Ombudsman found that while some issues were resolved promptly, others were delayed or poorly addressed. Several pre-completion items were missed and later re-reported. The developer cited contractor and material delays but failed to provide consistent updates. Approximately 40% of reported issues exceeded expected timescales. 

This part of the complaint is upheld. The developer is directed to reimburse the customer for agreed remediation costs: £3,500 for plastering and painting, £3,990.24 for flooring, £2,987.76 for the granite worktop, and £283.50 for cleaning. An additional £1,500 compensation is awarded for inconvenience and distress caused by poor workmanship, disruption, and delays. 

The Ombudsman found the developer’s complaint handling to be inadequate, citing untimely responses, missing documentation, and contradictory or inaccurate statements made to both the customer and the Ombudsman Service. £50 was awarded for poor complaint handling. The developer was also directed to carry out a full review of its handling of the complaint, including failings related to record keeping, internal communication, the accuracy of information provided to NHOS, and missed opportunities to resolve the dispute at an earlier stage.