Since Jan. 1, 2023, brokers must use an online bidding system where an online bid log is maintained and can be viewed retrospectively by all bidders. But very often this does not happen or deals are still made outside the rules of this bidding system.
What about this and what can you blame the broker for in this?
That’s a good question! We figured it out for you and here we explain it to you in simple terms. By the way this article was originally published on July 14, 2023 and updated on September 5, 2024 as a result of additional input from a.o. the Disputes Committee.
The rules of the bid log game
Most brokers in the Netherlands are affiliated with one of these three brokerage clubs: NVM, VBO or VastgoedPro. For these brokers (affiliated with NVM, VBO and VastgoedPro), as of Jan. 1, 2023, they are only allowed to sell homes through an Online Bid System and with a bid log. For all real estate agents not affiliated with such a real estate association, this rule does not apply. Please note that this requirement of Online Bidding is NOT a legal obligation. It is only an obligation of the industry associations NVM, VBO and VastgoedPro.
Now to the practice where things are still not going well. We’ll first give you a few common situations and then explain the implications for all parties.
Failure to follow the rules of the Online Bid System/ Online Bid Log.
Situation 1: Bidding late and not through the bidding system
A broker affiliated with NVM/VBO/VastgoedPro makes a bid by e-mail after a registration has closed. This even though it was clearly communicated by the selling broker that bidding was only allowed through the Online Bidding System. So the buying broker sends the bid in the wrong way ánd too late (when the deadline is already closed).
Situation 2: Overbidding after the home is already sold
The selling broker has already congratulated a buyer on the purchase of a home and also confirmed the purchase by email. The selling broker informs all the other bidders that they didn’t make it. Then the selling broker receives a new and much higher offer by e-mail from someone he just called off.
Situation 3: The selling broker secretly shared the amount of 1 or more bids with other interested parties.
The selling broker has told another prospective buyer what the bidding level is on a property so that prospective buyer knows exactly what is lying around and thus can unfairly try to buy the property (by bidding just above the highest bid present at the time).
What can you do as a bidder or (prospective) buyer in case of unfair bidding practices?
If you have been wronged by the broker’s dishonest actions, what can you do about it? We checked it out for you with the Dispute Commission and the rules of the industry associations. First, a little “spoiler alert”: in the end, as a plaintiff, you’re very unlikely to win (that’s our opinion). Still, we’ll explain to you what the procedure is. You need to follow the steps below. And also exactly in the order below.
Step 1: First, determine if the broker is affiliated with a trade association
If that is not the case, then you can only get your “right” by resolving it directly with the broker in question, and if that fails, then you usually have to resort to civil law. If it’s about a complaint due to unfair bidding practices, then civil proceedings are actually always hopeless. This is because unattached brokers usually do not have a code of honor and/or professional and code of conduct and cannot be disciplined.
Step 2: Resolve it yourself first with the broker
If the broker is WELL affiliated with the NVM, VBO or VastgoedPro, you must first submit your complaint in writing to the broker in question. You must then give the broker 1 month 1 month to resolve the complaint with you. If this is not successful, go to step 3.
Step 3: File the complaint with the Property Professionals Complaints Desk
Before being able to file the complaint with the Disciplinary Board, you must first go through the entire complaint procedure through. You do this by filing your complaint with the Real Estate Professional Complaints Desk. The problem with unfair bidding practices is, the Complaints Desk only handles complaints that deal with disputes about the matters in the agreement between client and broker. These include complaints about brokerage fees and quality of service. In this, the commission can, for example, undo the agreement or award damages. So in principle, the complaints office will not be able to help you if your complaint is about unfair bidding practices, but you still have to go through the entire complaints procedure. Only after you have done this can you proceed to step 4. Oh yes, it might be useful to mention that you are now 32 weeks (!!!) along. After all, you first had to wait a month for a solution with the real estate agent in step 2 and then another 22 weeks for going through the complaints procedure of the Real Estate Professionals Complaints Desk! Should you still feel like filing your complaint further at this point, go to step 4.
By the way, a tip: there are eight complaint counters in the House of Disputes. At these counters one can mostly ask questions and report complaints by phone. Employees of the Complaint Counter provide information to the caller and directional advice – without getting specific in content – in order, above all, to set the direction for finding a solution. All with the goal of resolving the complaint before it becomes a dispute. So it may be wise to first go over the complaint you have over the phone with the Dispute Resolution Committee’s Complaint Desk.
Step 4: File the complaint with the Disciplinary Committee for Real Estate Professionals
Now that you have gone through the entire complaint process in Step 3, you can report your complaint about the broker’s unfair bidding practices to the Disciplinary Committee for Real Estate Professionals. Going through the Disciplinary Committee process usually takes “a few months”(source). Looking at the period between the possible occurrence of the complaint of these proceedings (March 2023) and the decision of the Disciplinary Committee in February 2024, you can see that such a procedure can actually take almost a year in practice.
Do you stand a chance if you have a complaint about unfair bidding practices?
In this other article of ours, we explain to you, among other things, why we think there are actually no rulings by the Disciplinary Committee on unfair bidding practices. Tip: read that article here.
If it is about an unfair bidding practice where the broker has forwarded bids to other prospective buyers, then this violates the rules of the game (see here, here and here) of the industry associations and then a Disciplinary Committee for this could give the broker in question a “slap on the wrist”. See for this Article 10 of this brochure of the Disciplinary Committee.. Our opinion is that you must be able to prove that the broker leaked information.
In many cases, so-called “unfair bidding practices” may seem unfair from the buyer’s perspective, but may be that the broker’s actions are legally justifiable. Suppose a broker receives a higher offer after the conclusion of the bidding process, or even after a verbal sale. In such a case, the broker is simply obligated (according to the applicable honor code/code of conduct) to pass this offer on to the seller.
It is ultimately the seller who decides, and until a formal purchase agreement is signed, nothing is final. However, the broker should always continue to act professionally and transparently. Although situations such as this (i.e., unsolicited knock-out bids after a deadline or verbal sale) occur regularly, and real estate agents are usually not happy about it, there is (in our opinion) no question of disciplinary culpable behavior, as long as the real estate agent adheres to the applicable honor code/code of conduct.
Conclusion
Unfair bidding practices can only be handled by the Real Estate Professionals Disciplinary Committee, and the process to get here is long and complicated. Before the complaint can be filed with the commission, the complainant must first give the broker one month to resolve the conflict together. This is followed by a mandatory 22-week grievance procedure. So in total, the process takes almost 32 weeks. In addition, it is often difficult to provide evidence, or it turns out that the situation is not about “unfair” but “unpleasant” bidding practices. The difference is that dishonest practices are not allowed, while unpleasant practices may be consistent with how the broker MUST act correctly, but are nevertheless annoying to an aggrieved person.
Disclaimer:
Multiple sources were used to arrive at the content of this article, but the author cannot guarantee the complete accuracy of the information cited. Use of the information contained in this article is therefore entirely at your own risk and the author shall not be liable for any damages arising from such use.