Yesterday, in part one of this article, Chris Wood explained the background to his dealings with NTSEAT and others. Today he concludes the article with his views on what should happen next.
For 30 years, like many others, I fought for high standards within the industry to protect the property buying and selling public and, to ensure estate agents all played on a level, lawful playing field.
Agents don’t need more legislation, they just need the current laws to be properly and evenly policed and enforced. In theory, that role falls to local Trading Standards officers, the two recognised Ombudsman schemes, NTSEAT and, amongst others, The CMA and HMRC. The problem is, there doesn’t appear to be a joined up approach to policing this industry that deals with trillions of pounds worth of property.
NTSEAT appears to have bid for some seemingly easy government money, only to discover that they might actually have to do something to earn their keep, and been woefully understaffed and unable to perform.
Rather than working with offers of help from within the industry and acting upon clear unambiguous evidence of serious criminal actions by some agents, it chose, instead, to ignore law-breaking on a corporate scale and build a seemingly personal vendetta against what they thought might be an easy target.
This is a taxpayer funded outfit that has wasted, I’m guessing, thousands of pounds and hundreds of working-hours on doggedly trying and failing to fabricate a case of fraud, whilst other firms have actually been issued with serious fines by HMRC for multiple money-laundering regulation breaches, investigated and castigated by numerous consumer programs and newspapers, but not so much as a tickle or mention by the team from Powys.
Ditto the TPOS and NAEA. The Property Ombudsman scheme was made aware of hundreds of agents who had not been registered for a redress scheme but were using their logo. The former a criminal offence in and of itself, the latter a breach of TPO code and Consumer Protection Regulations, let alone, arguably, obtaining business by deception.
Did they throw them out, refer them to NTSEAT or local trading standards? No, they very quickly, quietly and happily took tens of thousands of pounds in membership fees to fast track them in as members (TPOS is a private limited company). A deaf ear and a blind eye was turned when other troubling problems and breaches of the law and good agency practice were notified to them “Not our job. Can’t help. We only deal with complaints from consumers. Sorry. Bye!”
The NAEA too, seemed to be a stranger to ensuring it’s members and the public were protected from cowboy agents and law-breakers. In fact, the NAEAs very raison d’être. Keen to publicly endorse and even praise one notable PLC member firm that was happily and publicly rubbishing other NAEA members and law-abiding agents. Yet, the NAEA was struggling with a spate of internal resignations, sackings, non-disclosure agreements for former staff, allegations of bullying, and rather large unexplained holes in their accounts. Their solution? Attempt to silence, deride and exclude the whistleblowers. Not a great example to the public or agents in general.
A major problem in estate agency, is that the public often don’t know they’re being mislead, poorly served or lied to and, when they do, they would often rather keep quiet until the the transaction is concluded as they ‘don’t want to rock the boat, it’s stressful enough as it is’. By which point, they just want to enjoy their new home and don’t see the point or need to add further stress by complaining.
Often, it’s an agent who can spot poor practice, unlawful or even illegal behaviour, but who can they turn to? TPOS won’t accept complaints from other agents. Clearly not NTSEAT as it currently stands; they are either incapable, incompetent or a combination of the two. Local trading standards? Usually, this is met by being told to speak to NTSEAT and/or, being told they simply don’t have the resources. The NAEA then? This requires that the offending agent is a member which most nowadays aren’t and, NAEA has no statutory powers in any case. They can fine or expel a member, or both. The agent can simply pay any imposed fine and keep trading. The public will be none the wiser.
The solution? A root and branch review of the status quo. A properly funded, qualified and experienced national estate and letting team with clear, unambiguous terms of reference that include investigating and, where appropriate prosecuting all aspects of property law, codes and lawbreaking; with the ability to pass cases to and liaise with specialist agencies for action where appropriate (e.g. HMRC anti-money laundering team or, The CMA). The team must have a clear and simple structure that also allows any complaints about the team itself to be swiftly, fairly and independently investigated. That recognised Ombudsman schemes have a legal requirement to pass on reasonable suspicions or allegations of wrong-doing/ illegality made by consumers or agents, to trading standards or other appropriate statutory agencies.
The ASA is a well meaning body with generally sensible codes (that it seeks to impose on all advertisers) but, they are a private limited company, with no statutory powers and a self-selecting quango with no independent redress or oversight. With no due legal process and seeming impunity it can publicly state or imply a firm or individual has broken the law. As such, it has power without responsibility or accountability. A dangerous and inequitable situation that needs reform.
The public deserve better. Law-abiding agents deserve better. The system needs urgent, systematic and comprehensive reform.
Postscript:
During this period, my marriage had ended my business had been hit like so many others, by a cash flow crisis and I was receiving counselling and treatment for PTSD and depression.
On the advice of an insolvency specialist, my chartered accountant and legal advisors I took the decision to close my office and to cease trading (except to attempt to claim any outstanding monies for my companies creditors as required under a directors responsibilities). The business was subsequently formally and legally dissolved some months later by Companies House.
Subsequent to the publication of this story EYE received the following statement from National Trading Standards:
The National Trading Standards Estate and Letting Agency Teams are committed to protecting consumers and safeguarding responsible estate and letting agencies. We recognise the importance of robust opinions and open discussions to support constructive debate that will benefit the industry – and we are particularly grateful to the Property Industry Eye in particular for its work to support the industry for all. However, in the interests of challenging misinformation, we should highlight that this particular opinion piece includes a number of false and unsubstantiated claims.”
This should be put in front of our hallowed housing minister. However I doubt anything would change as the government do not want change. The property industry in this country is the cheapest, to my knowledge in the western world. Our politicians fear that if they properly regulate estate agents, fees would probably rise. I think I disagree with that, but that is probably the view.
We all need to lobby our MP, but that will be like Turkeys voting for Christmas!
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NTSELAT have as I understand it authority over local trading standards and the redress schemes.
Instead of everyone dismissing complaints and observations by agents of agents as the traditional “agents gripes” (NAEA get out of doing anything about it card for as long as I can remember; at least 35 years) a simple reporting process detailing the complaint with reference to the rule, legislation or case law, directly to a better funded, bigger and better trained NTSELAT team, rather than local trading standards [who realistically cannot be expected to cope with the variety and complexity of such specialist white collar complaints] would provide a more effective resolution to a lot of the issues of mal-practice by agents. With the sanction of redress being suspended while the case is investigated and withdrawn for serious breaches, a simple binary function of portals [ Has redress= Yes, Has Redress = No] would allow instant and effective sanction against bad agents; They would simply find their portal listings are temporarily or permanently invisible.
I am not as critical of NTSELAT as Chris I just wish they would listen to and take help when it is offered to them.
A competitive service industry fairly much self regulates itself, bad agents don’t last long but what is happening at the moment is the laws and regulations that govern the industry are being flouted to the detriment of consumers and agents who stick to the rules. It is not difficult to bring bad or defiant agents into line, let them explain to clients why their listing isn’t showing on the portals.
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Good comment, in effect agency becomes self regulated because wrong doers are shopped by their competitors. You then need a reasonably funded ‘authority’ . However, watch big money kill off any sensible idea like this!
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It is low cost, high impact and immediate, it makes use of the redress schemes as an effective deterrent.
That accidental sharing of the portaljuggling report which highlighted 15 forms of portal gaming was enough , without any further sanction to stop 95% of juggling. No professional firm want to be caught with their trousers round their ankles, the thought of their listings being suspended from portals would be hard to live down.
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Cap the commission of an estate agent at £10,000 whatever the value, and a minimum fee of £2,000 up to £1m. Then go up in bands up to £10,000.
Surveyors need their fees increased, as do conveyancers.
Mortgage companies need to stop their fees, and must include them in their actual lending rate.
Time for sweeping change.
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Haven’t we just seen what happens when agents aren’t incentivised to negotiate a better deal for their clients? Duty of care and skill goes out of the window, property is plonked on the portals and the result is the saving in commision is more than lost to underselling homes to whoever comes along.
Trying to fix problems that aren’t problems won’t solve breaches of CPR and BPR.
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‘arent’ incentivized’ – it’s your job. It’s not fee-related.
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In one …. and all down to resources and finance. Many a local Trading Standards Officer will tell you that there isn’t a major problem in Estates Agency industry and is supported by the annual TPO report. Yes there are rogues, as in many walks of life but criminal behaviour in the main is not one of them in estate agency, more procedural irregularities. A few are criminal, others give the industry a bad name or like to spread fake news and the age old media pushing ‘dislike for agents’. Where there is glowing breaches ….. where are the regulators!!! Hiding behind policy?
Agents don’t need more legislation, they just need the current laws to be properly and evenly policed and enforced. In theory, that role falls to local Trading Standards officers, the two recognised Ombudsman schemes, NTSEAT and, amongst others, The CMA and HMRC. The problem is, there doesn’t appear to be a joined up approach to policing this industry that deals with trillions of pounds worth of property.
A working relationship has never been approached. One that will help build the industry between all the parties. An even handed approach to pro-active policing would go a long way, not big feet suddenly appearing on the door mat.
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The TPO are not fit for purpose . I have been helping a landlord with a complaint against one of the National Agents who have a clause in their terms of business preventing a Landlord from ending the management contract unless & until the tenants vacate the property.
The internal complaints procedure was exhausted and a Complaint was sent to the TPO at the end of January 2021.
In March after collecting evidence they advised they would deal with the complaint within 90 days.
At the end of June 2021 the Landlords were informed by the TPO they classed the complaint as a complex complaint and needed to pass it over to an Adjudicator.
They assure the Landlord there will be a thorough review but are unable to advise of ANY timescale as to when the review will be completed.
So the TPO have absolutely no idea how long it will take them to deal with the complaint – unbelievable !
How can this be an acceptable way to deal with complaints against Agents ?
This compares poorly to the excellent performance of the Property Redress Scheme who deal with complaints within 35 days.
A thorough overhaul is needed of the self regulation of the Industry.
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It doesn’t require large sums of money or extra resource to keep the chancers/cowboys in line.
Just transfer the NTSELAT role (not the headcount) to the CMA.
The CMA should then hold the redress schemes to account (TPOS annual report needs to be more transparent) and monitor the portals (enforcing the sin-binning of any EAs who play games) as well as ASA and BPR/CPR.
The CMA have proved very effective in dealing with Cartels and have shown they are not afraid to bite (they also have significant resource/budget).
It would be unrealistic to expect the industry to police itself – NAEA seem to have difficulty controlling their own members behaviour. When a significant number of industry gurus/consultants/trainers scramble to support what most decent EA find abhorrent – you know you have a problem !
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