Estate agents should ensure that their terms and conditions cover the situation where a property is sold through the transfer of shares in a holding company.

In a recent case, an agent was instructed by a business T to dispose of the leasehold interest. In due course, a sale was arranged with the transaction being structured as a transfer of shares in T’s holding company (as a stamp duty reduction ploy). It was held that the agent was not entitled to commission; although he was the ‘effective’ cause of the transaction, the fact was that T had not sold anything (and indeed had not been a party to the transaction, since it was its parent company that had been sold).

Many transactions were structured in this way in the last years of the stamp duty regime, and one wonders whether there are large amounts of commission that could now be reclaimed! Estafnous v London & Leeds [2009] EWHC 1308 (Ch) (access free at www.practicalconveyancing.co.uk).