As many of you are aware we are Rosehip Partners and manage our ubiquitous lead generating websites Hamptons Properties and Hamptons Rentals so as you might imagine we generate a lot of business and are involved in a lot of transactions with a lot of customers and clients. What I’m saying is that if we haven’t seen it all we’ve seen a lot!
So we have this recurring issue now. It’s not a new issue but it seems to be happening more frequently. In fact three of our agents have recently had the same problem in the context of rental renewals from last year. Despite their having faithfully stayed in touch with their renters trying to get them back into the same house or a new house, the renters have essentially gone silent only to re-rent the same house but directly with the Landlord. Often the Landlord offers a more favorable rent since they agree with the tenant that there will be no commission paid to the agent. But wait a minute, It was the Rosehip agent who introduced them to the property in the first place! Now we find ourselves in heated discussions with our landlord clients about their paying us the fee we are due by agreement.
I know, cutting out the middleman is a time honored tradition but let go through the facts and you be the judge. Our listing agreements that the landlords sign include a clause that for renewals and extensions to the same tenant we are due a fee. The standard Hamptons Rental commission is 10% of the gross rent and every Hamptons real estate agency has this same clause in their agreements. The landlords sign these agreements. At Rosehip, we actually have a downward scaling fee structure for renewals so frankly we feel it’s pretty fair. The point is that the work of the agent is the procuring cause of that rental for that landlord and should that tenant re-rent or even purchase the house the agency is due a commission by agreement.
So here’s the question: Who is being unethical here? Essentially the Landlord and the Tenant are colluding to enter into an agreement without letting the agent who introduced them know. Is it unreasonable for an agent to expect any loyalty from a renter or a landlord in this situation? Technically, in Hamptons real estate practices the commission is the Landlord’s responsibility. They are the ones who have signed the commission agreement. Does that absolve the tenant? All good questions. Are agents being sleazy for simply expecting any sort of commission payment for a renewal? Your comments are welcome…