How to terminate a contract with a realtor and real estate agency

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Modern realities simplify the process of buying real estate, thanks to the existence of special agencies or private realtors. After signing the contract under certain conditions, the specialist begins to search for suitable real estate, based on the customer’s requirements. But such manipulation does not always lead to the expected result. Often the search drags on indefinitely and does not bear fruit. This leads to the disappointing conclusion to terminate the agreement. In such a situation, every person wonders how to terminate a contract with a realtor without consequences.

However, few people know what to do to successfully terminate a contract with a realtor. The procedure may result in the payment of fines, penalties or other, more serious liability. In order to avoid negative consequences, you should understand this issue.

How to prevent negative consequences?

Regardless of the terms on which the agreement was concluded between the parties, it is valid and regulated on the basis of the law “On the Protection of Consumer Rights” and the Civil Code of the Russian Federation. In order to protect yourself from negative consequences in the event of termination of the contract, you should be vigilant at the time of its conclusion.

Important! The main point that should attract the client's attention should be the point that a certain commission should be paid only if the process of selling the property has taken place. In other words, the object became the property of the recipient.

Most often, an exclusive contract or a contract for the provision of services is concluded. Based on its points, the realtor undertakes to find a buyer and take other actions aimed at the speedy sale of the property. Such an agreement may have either a fixed-term or an indefinite status. Experts advise specifying a specific period of no more than 3 months. If necessary, it can always be extended. Entering into an open-ended contract often results in the process being drawn out for an indefinite period of time.

Unilateral procedure for terminating the contract. How to avoid penalties and fines

If you terminate a contract unilaterally, you should act wisely; this will help you avoid paying penalties and fines.

In order to understand the risks and inevitable losses, it is necessary, even at the stage of agreeing on the contract, to provide for several options for the development of events related to the purchase and sale of real estate, and, if possible, to spell out in detail the obligations of the parties in the event of the intention of unilateral termination of the transaction by one of the participants.

It should be taken into account that a number of requirements previously stated in the contract may contradict the Civil Code of the Russian Federation, then their application is impossible.

Threats of fines and penalties will have no basis under the law.

In the situation of paid remuneration and subsequent unilateral termination of the contract, you can demand a refund, referring to the law.

The agency can only retain the amounts spent, citing the fulfillment of obligations to fulfill the contract. Realtors are required to return the rest of the money without delay.

Thus, you can terminate the agreement unilaterally at any time, only by losing funds for actual expenses incurred, supported by documents.

This is in accordance with the provisions of this legislation. If the decision to terminate the contract is made finally, a number of actions must be taken to prove intentions.

This will require written notification with a mandatory date.

Then there are two ways:

• or independently deliver the notification to the real estate agency specialists with mandatory confirmation of receipt, this can be an employee’s signature on a copy of the notification
• or send a notification by registered mail to the legal address of the real estate company; be sure to keep a copy of the document along with the postal receipt

If the dispute is considered in court, confirmation of the fact of notification of termination of the contract will be required.

Phone calls, emails or fax messages are not accepted as evidence, since they could have been made by anyone, including those who know the passwords.

It makes sense to terminate a contract unilaterally if the financial benefit from its termination is obvious

Termination of the contract occurs unilaterally when an independent decision with financial gain appears.

But the risk of fines can cloud the prospect of a successful transaction.

For example, an agreement with an agency has been agreed upon, signed, and entered into force.

But if a buyer of the apartment appears on terms that are better than those specified in the contract, you will want to terminate the contract unilaterally.

There is a risk of paying large fines and penalties for failure to fulfill obligations or improper fulfillment of obligations.

Resolution of controversial issues arising between citizens and real estate companies is carried out in accordance with the provisions of the Federal Law “On the Protection of Consumer Rights”

It is necessary to distinguish between two consonant concepts with different consequences.

Each service provided under the contract must be reflected in a properly executed and signed certificate of completion of work (services).

Main details

If the contract has not yet been signed, the following points may help in the process of concluding it:

• If the agreement specifies the need to pay for other services in addition to the main commission, for example, money for advertising, communication with potential clients, gasoline, etc., then the client will have to pay the required amount, subject to the provision of supporting receipts and receipts.
• If the realtor does not comply with the points specified in the agreement, the client has every right not only to terminate it, but also to demand payment of a penalty.

In most cases, the termination procedure takes a long time due to lack of experience and other issues. In order to find out how you can terminate a contract with a realtor, you should pay attention to the procedure in such situations.

Results

Thus, the grounds for termination of agency relations may be the expression of the will of one of the parties, provided that the validity period of the transaction was not agreed upon, the inability of one of the parties to further participate in the execution of the contract, the agreement of the parties or the fulfillment of their obligations, as well as the occurrence of other circumstances, in which the execution of the agreement becomes impossible.
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What are the possible situations?

Clients are wondering how to properly carry out the termination procedure when certain circumstances arise. These are controversial situations that can harm the reputation of the real estate agency, as well as the client’s plans. The customer is always interested in a possible method of termination that will allow him to avoid paying fines and other undesirable consequences. It is impossible to answer this question unequivocally, since everything depends on the individual characteristics of the situation. Several reasons can be a catalyst for the emergence of such requirements from the customer:

• Violation of the norms established by law, obvious fraud or violation of contract clauses. Having studied the client’s reasons, we can conclude whether he has a chance of terminating the agreement. If the case goes to court (many realtors try to recover damages in this way), the client's information will be taken into account and may seem too meager and unreasonable. In this case, the lack of necessary data may be considered a violation of the law.

Example: The contract specified an amount in a certain currency, which unexpectedly depreciates due to economic reasons. However, in this case, the client must make the sale exactly at the price specified in the agreement. This is especially important when concluding an exclusive agreement. The realtor's demands may be unreasonable only if the agreement included a clause on recalculation of the final cost in the event of a change in the exchange rate.

In such a situation, the law sides with the client, allowing him to refuse the service, but obliging him to reimburse the cost of the service that has already been provided by the realtor. It is possible that it will be equal to zero. In order to avoid such a situation, many real estate agencies prefer to pay for services in stages, which complicates attempts to terminate the agreement.

• The service is no longer relevant. A situation is possible when the client himself finds a buyer after a long wait. In this case, he no longer requires the services of a realtor or agency. The relevance of the service may be lost for other reasons. The client should immediately notify the realtor about this so that the parties can resolve the issue amicably. The process will not cause difficulties if the agreement did not have exclusive status.

• Life circumstances. If such a situation was spelled out in the agreement, it may become a significant reason for its termination. This refers to circumstances beyond the control of both parties. In this case, the client can receive an answer to the question of how to terminate the agency agreement with the real estate agency, without the need for additional payments.

What is important to pay attention to?

There are a number of important nuances that need to be checked in the contract with a real estate agency.

On the part of the executor, the document must be signed by the director or his deputy who has such authority. If the agreement is signed by an ordinary agency employee, it will not have legal force.

The charter and other documents referred to in the text of the agreement must be publicly available.

The subject of the agreement must contain a clear description of the services of realtors and their payment upon completion.

It is also important that the property in respect of which the services of realtors will be provided is described in detail, and its characteristics are indicated in detail and unambiguously.

It is important that the real estate agency undertakes to check the property for encumbrances, and also collect all the necessary documents and register it in the event of a purchase.

Completion deadlines must be specified for each stage of the contract.

It is also important to specify the list of services for a certain fee, so that the contract does not contain abstract broad concepts, such as “real estate services” in general.

All additional fees must be negotiated and depend on additional services.

When making an advance or deposit, you need to understand the difference between these concepts. The advance payment is returned upon termination of the contract, regardless of the reasons for termination. The deposit is returned in double size if the contract is terminated due to the fault of the agency, but is not returned if the contract is terminated by the customer himself.

We wrote in detail about the nuances of processing a deposit and advance payment here.

You also need to describe in detail the options for terminating the contract. In particular, can it be terminated unilaterally and what liability of the parties is provided for in this case.

The contract must be equal. In order to make sure of this, you need to check the clause on the responsibility of the parties.

Procedure

In order to increase the chances of a peaceful resolution of the issue, you should notify the other party of your desire to terminate the agreement. The client must send the agent a corresponding notification. It can be delivered personally or given to a company employee. If the notice is sent by mail to the legal address, the customer should keep a copy of it.

The procedure for termination is as follows:

• The written notice shall indicate the reasons why the person decides to terminate cooperation.
• Notification is sent to the realtor using one of the methods listed above.
• The originals of the contract must be destroyed by both parties for final termination.

However, not knowing how to terminate an agency agreement with a real estate agency, many clients face difficulties. If the contract was not open-ended (the realtor is looking for a buyer until he achieves the desired result or the client decides to terminate the contract), then it will be almost impossible to avoid penalties.

Important! Some points must be specified in the agreement. This will protect the client from emergency situations.

• Responsibilities of a real estate agent (all actions that are entrusted to a realtor must be described in detail and point by point).
• Responsibility of the agency in a situation where the agreed obligations were not fulfilled.
• A list of all services and their fixed cost (advertising on certain sites, other types of promotion and spending).
• The need to submit a report within a predetermined time frame.
• The number of buyers that a realtor commits to finding within a certain time frame.
• Duration of the contract (does not apply to the performance of the realtor’s duties). It is recommended to describe the process in stages in order to have the necessary evidence in case of inaction of the realtor (for example, searching for a certain number of buyers, placing effective advertising, etc.).
• Possible reasons for termination of the agreement for both parties.
• Indicate the exact cost and the minimum level below which it should not fall.

The client has the right to include in the agreement any other clauses that do not contradict current legislation. If a real estate agency refuses to sign an agreement on the terms set by the customer, it is not recommended to conclude a deal.

About order, rules and nuances

Each service that you want to receive from the agency should be recorded in a document

In the case of a signed contract, the agency bears responsibility, including financial responsibility, for the level of customer service.

This strengthens the seriousness of the staff and motivates specialists to fulfill their obligations efficiently at every stage of work.

Each service provided under the contract must be documented to avoid misunderstandings.

These can be inspection reports, transfer of documents, receipts, inventories.

It should be noted that the primary price of the property is always higher than the average in the real estate market. Reduction steps, their necessity and justification can be included in the text of the contract in the form of an approximate schedule with threshold values.

The Civil Code of the Russian Federation does not exclude the addition of any clauses to the standard contract at the discretion of the parties.

More about the exclusive agreement

Faced with the question of how to terminate a contract with a real estate agency, many clients are forced to pay fines and penalties. The reason for this is the preliminary conclusion of an agreement with exclusive status. Such an agreement implies the complete transfer of all rights to conduct the sales process to the realtor. The client not only cannot intervene in the matter, but also does not have the right to independently sell his own real estate, if a suitable client is found.

By concluding such an agreement, the realtor risks facing huge losses if the agreement is terminated. For this reason, he strives to protect himself as much as possible from this and does not agree to include termination clauses in the contract. Most clients have no idea how to terminate a contract with a real estate agency if it has exclusive status.

In this case, the procedure may entail the payment of a large commission. The only condition under which the agreement can be terminated without loss for the customer is a gross violation of the terms of the agreement by the realtor. Such agreements are recommended to be concluded by clients who are completely confident in their desire to sell real estate and completely trust the agency in this process.

We terminate the contract by mutual consent

Everything is simple here: if the parties to the agreement have no reason to continue the relationship, and the agreement is drawn up correctly, then it all comes down to signing the agreement. It stipulates:

• termination period (this is important, because from this date no obligations towards the other party should be fulfilled);
• schedule for repayment of obligations (return of money, supply of goods or provision of services);
• warranty obligations (if we are talking about the delivery of goods);
• waiver of future claims.

That’s it, the contract is terminated, and mutual settlements are carried out as agreed by the parties.

Ways to Avoid Payment

In order to find out how to terminate a contract with a realtor without additional payments, you should refer to its clauses. Penalties can be completely avoided only if the realtor did not suffer losses. The legislation establishes the need to cover only the costs of services actually rendered. Some situations can cause serious problems.

Promotion and advertising costs

Trying to find out how to terminate a contract with a realtor, many clients are faced with the fact that he demands payment for advertising. According to the agent, he has already invested in this business, has suffered large losses and needs to be reimbursed. Promotion is the placement of advertisements on various platforms, which requires advance payment.

Important! The client must pay only for those services, the implementation of which can be documented.

If the realtor insists that he spent a certain amount, then in order to reimburse it, he will have to show supporting documents.

The property was sold by the buyer

Many clients want to know how to terminate a contract with a realtor because they are faced with dishonest performance of their duties. Agents only give the impression that they are actively working: they report found buyers, send messages, and mislead clients in other ways. In reality, the process does not move forward.

As a result, the seller finds a buyer on his own and wants to terminate the agreement. However, the realtor begins to demand compensation for damages for the time spent. Based on Article 782 of the Civil Code of the Russian Federation, the customer has the right to terminate the agreement if he found a buyer on his own, since this means that the agent failed to cope with his duties. If the realtor can confirm the costs, the customer will have to reimburse them. Otherwise, he is not obliged to make the payment.

Advance and opportunity to return money

Wondering how to terminate a contract with a realtor, many clients also seek to return their funds. If the customer has made an advance payment, but the realtor has failed to fulfill his responsibilities, he has the right to demand a refund of the money spent.

Consumer rights

In order to properly terminate an agreement, it is important to know about your rights prescribed by law. If the contract was not fulfilled for certain reasons, the consumer is assigned the following rights:

• The client can contact another real estate company or begin an independent search for a buyer.
• The client can refuse the agent’s services at any time, and undertakes to cover all confirmed expenses.
• Any monies paid by the client may be returned if the agent fails to fulfill his or her duties. In such a situation, the contract is terminated automatically, and the funds are returned to the customer within 10 working days.

What kind of deal do you make with a realtor?

In practice, a so-called service agreement is drawn up between the realtor and the customer. In life, it can also go by other names, for example, a contract of assignment or an agency agreement. Many people think that these are all the same agreements. Not at all. They often specify their own conditions and requirements for the participants in the transaction.

For example, there is a clause in the agency agreement that prohibits the customer from contacting other realtors for the period of cooperation. The contracts we indicate may differ in the tasks performed. But in any case, the document must clearly state the procedure for termination.

The customer is always right

Whatever disputes arise, it is necessary to proceed from the eternal rule for the performer - “the client is always right.” Any agreement between a realtor and a customer is fully regulated by the rules “On the Protection of Consumer Rights”.

All services related to real estate activities (selection of housing options, assistance with purchase, registration, rental, and so on) are specified in the above-mentioned document. Thus, the client has every chance to protect his rights under the law, and the real estate agency, in turn, must comply with them.

Let's talk about guarantees

Based on the consumer protection law, the client of a real estate company has a number of guarantees:

1. In a situation where the terms of the agreement infringe on the rights of the client, they are declared invalid (Article 16 of the law). What does it mean? Anything can be written in the document, but if the specified points worsen the client’s position or infringe on his rights, then they can be safely considered invalid. For example, when terminating a contract, a client is often required to pay a penalty. This condition worsens the customer's position. In such a situation, it is considered invalid.
2. If the consumer has fulfilled all the conditions for paying the expenses incurred by the contractor, then he can refuse to fulfill the contract (Article 32). What does it mean? A client of a real estate company can always refuse services if he has reimbursed all the realtor’s expenses, for example, expenses for telephone calls, transportation, advertising, and so on. In this case, the corresponding expenses must be confirmed by receipts. If the case goes to court, then documents will definitely be needed.
3. If the realtor received money from the customer, but did not perform the services specified in the agreement, then the customer has the right to terminate the contract. Such a requirement must be specified within ten days from the date of presentation (Part 1 of Article 31). In the event that the requirement was not satisfied on time, the realtor’s client may demand a penalty of 3% for each day overdue.
4. The realtor must fulfill the requirement described in paragraph 3, in accordance with paragraph 5 of Article 13. If the voluntary procedure for fulfilling this requirement has been violated, the dispute will be resolved exclusively in court. The court, in turn, must oblige the realtor to pay a penalty and return the entire amount due.

How to make an application

Termination of a contract with a real estate agency begins with the correct preparation of an application. The main importance during registration is the content, which must meet the standards of a business document and at the same time contain all the necessary information. The document can be divided into three main parts:

• Introduction - all information about the addressee, as well as the sender, is indicated here.
• The key point is that the request for termination is indicated here, as well as the reason why the customer made such a decision. The terms of the contract that were violated or the obligations of the realtor that he did not fulfill must be spelled out.
• The final part includes a list of all supporting documents, the sender’s signature and date.

The application can be written either manually or printed on a computer. The legislation does not prescribe certain rules related to its registration. Most often, A4 or A5 sheets are used for writing or printing. Experts recommend writing such a statement in duplicate or keeping a copy for yourself in order to have actual proof.

Choosing an agency

Of course, the reputation of the realtor or the company he works for speaks for itself. It is worth giving preference to those companies that have been operating in the market for a long time and are members of professional associations. But you should be wary of agencies offering to move quickly to concluding an agreement.

Conclusion of an agreement

The agreement between the customer and the realtor (contractor) is a key document that defines the entire process of their interaction and their responsibility.

Each agency may have its own form of agreement. The following are also discussed separately with the customer:

• Commission.
• Agency agreements.
• Contracts of assignments.
• Agreements on additional paid services.

The Civil Code regulates relations within the framework of such agreements and determines their content. Mandatory information of the contract is:

• The contractual relationship itself, which is described in the introductory part.
• Subject of the agreement.
• Obligations of the parties.
• Deadlines for their implementation.
• Cost and payment procedure.
• Conditions for termination of the contract.
• Responsibility of the parties.

Each part of the agreement defines the stages of the relationship between the parties.

How to send it to the performer

The request should be sent to the counterparty in a way that will later confirm receipt of the request:

• hand over personally to the representative of the counterparty, in this case, on a second, identical copy, which remains with the applicant, obtain the signature of the accepting representative as confirmation of the transfer of the application;
• send by registered mail with return receipt requested;
• use the electronic document management system, if it is provided for in the agreement and allows you to confirm the fact of sending and receiving requests between counterparties.

An agreement is not a mere formality

Often customers do not take the signing of the contract responsibly, considering this moment a mere formality. But discussing working conditions and verbal promises cannot guarantee that the realtor will fulfill his obligations.

Therefore, it is important to insure yourself and draw up a competent agreement, even if a trusted agent, recommended by close friends or relatives, is hired to sell an apartment or look for a suitable housing option.
A true specialist will not be embarrassed by the desire to confirm a business relationship by signing papers: such actions will only earn respect from a good realtor and will be the beginning of a fruitful cooperation. Submitting ads to 200+ sites in one click