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Overseas Property Professional

If you have a legal issue, email theproblempage@opp.org.uk and we’ll put your question to our panel of experts.

Q: How do I ensure I am paid commission from a developer on time?

A: Give yourself the best chance of avoiding any misunderstandings as to the timing and level of commission by signing an agency agreement.

The timing of commission payments tends to vary between agents being paid in full on payment of the buyer’s first major deposit, or being split between the deposit and any instalments made between then and completion.

When advising buyers, we like to see a proportion of agents’ commission deferred until completion. This tends to give you more motivation to stick with buyers if there are problems with them and their developer before completion. However, having some commission deferred will be a greater administrative burden for you. It may affect cash flow and, if you only pay your sales consultants on receipt of funds from the developer, it may also affect staff morale! So when you agree to be paid will very much depend on your business model and bargaining power with the developer you are negotiating with.

If late payment is a concern, there might be an answer. One way to ensure prompt payment of commissions once they are due is to have a contract in place with the developer, agreeing that regulated solicitors acting for your buyer can deduct your commission ‘at source’ when paying the buyer’s deposit to the developer.

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