The Consumer Protection from Unfair Trading Regulations (CPR) were introduced in the UK in 2008 and they applied to all businesses in the UK from that date. Estate Agency had a delay in any enforcement due to the fact that The Property Misdescriptions Act remained in force until 2013.
You will be surprised to learn that trading standards have never in 15 years issued guidance on CPR to any business sector that has included specific aspects that they deem to be material information. So the publication of this guidance was a significant step for trading standards and it’s more than a significant step for agents.
I took some time to review and consider it, because at a basic level I believe that clear guidance benefits everyone; agents and consumers. I was worried it would stretch the boundaries too far and miss the target. For me it definitely does both. This might surprise some of you given my trading standards background and my support of strong consumer protection and enforcement.
It is interesting that every organisation on the steering group is 100% behind the guidance and of course all the associated businesses that will potentially benefit from it are behind it. Surprisingly, there has not been one critical voice heard in the agency media. Not one! Given the significant change this makes to the estate and letting agency business model I would have expected someone to stand up for the traditional business model. Perhaps I am the only one that’s critical of it?
However, I am critical, firstly because the guidance outlines 21 areas where there is or might be material information to disclose to potential buyers and I don’t think many of the areas are material information.
Traditionally, an estate agents initial role is to market a property to get interest from potential buyers. They point out the main features of the property – the address; the type of property; the number of bedrooms. the sizes of the rooms; a plan, and anything else they feel is appropriate, including anything that they should be aware of that might be material or detrimental to the average buyer. The agent then gets potential buyers to view and finally, they get potential buyers and sellers to agree a sale informally. The emphasis should be on the word ‘informally’ or if you like, ‘subject to contract’. Once that informal agreement is made the actual ‘selling process’ starts.
Before I go any further I need to go back to the Regulations, because they state that businesses (agents) should act with professional diligence, which is defined as ‘the standard of special skill and care which a business (agent) may reasonably be expected to exercise towards consumers’. General government guidance on CPR clarifies this and states, ’The word ‘special’ is not intended to require more than would reasonably be expected of a business (agent) in their field of activity’.
The National Trading Standards Estate and Letting Agent Team did agree with this because in their previous CPR guidance to agents they stated on page 9 that “At the outset of the marketing process, you are not expected to research issues that are outside your line of business, for example, where your business is marketing property and the issues are those that a surveyor or conveyancer would investigate.”
Engaging third party professionals has never been something that is ‘reasonably expected’ of an agent. Most professional estate agents have never done so. How then can it now be the case that NTSELAT state that compliance, “may require, where applicable, the engagement of a conveyancer or surveyor, which can either be via the client themselves, or via any additional services offered by the property agent. If such a service is provided, any charges should be outlined and explained to the client up front …”
Plus, there are over 90 online links provided within each guidance document for agents to use when they are instructed to market a property. Some 90% are not used by agents currently. Granted, not all apply to every property, but even if only a third are relevant how long is that going to take and there are costs involved in using a some of them.
How did it get to this point? It makes no sense and it is clearly stretching the boundaries of estate agency way too far.
This whole process has been side tracked, but the notion that providing all this information will reduce fall throughs. It will not! Trading Standards have missed the real target. Solicitors. Their delays cause a significant number of fall throughs. so what they should have done or should do is go after solicitors to provide this information ‘up front’.
Solicitors are not exempt from CPR. The Law Society agree with that; however, as we know solicitors follow the old legal expression ‘Caveat Emptor’ or ‘buyer beware’ and so they go through this drawn out, back and forth conveyancing process that works for no one other than solicitors.
We all know that traditionally the conveyancing process is initiated by the potential buyer who gets a survey and their solicitor starts to do the searches and request information from the sellers solicitor. They then check all the issues, i.e. all the material pieces of information and report back to the potential buyer and, if the buyer is happy with everything they and their solicitor discover, the sale takes place – generally, estate agents are nowhere to be seen during this process.
Surely, solicitors acting for the seller have an obligation under CPR to provide all the material information up front and not wait to be asked for it and drag it out for weeks; often months? That’s would prevent a large percentage of fall throughs.
Perhaps they are not as easy a target!
David Beaumont is managing director at Compliance Matters
How can solicitors/conveyancers provide all the material information up front, if they aren’t instructed until after an offer has been accepted?
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Great for a solicitor to be instructed before a sale is agreed
Helps his profitablity and cash flow
Around 25% of instructibons never get to a acompletion
Many times vendors circumstances to and they decide not to move so instructing a solicitor would just cost them money for no reason
Just this week an older couple in my road who had just placed their property on the market have now withdrawn it as the lady has just been dignosed with Alzheimers so they do not now wish to move
A guy who works with me had his house on the market but he and his wife could not find antything they wanted to move to so have withdrwan it and will extend
Chap who i have a beer with put his house on the market to buy a new house – when the price of the new house was released he and his wife decided it was too much for them to commit to
This is 3 people I know personally in the last month or so who have changed their mind about selling which we all have the right to do
If solicitors want a vendor to instruct before a sale is ageed they should either agree to do preliminary work for no fee as estate agents do and charge on competion or if they want to be paid in advance agree that if as property does not proceed to completion they refund all fees to the client
Estate agents do not get paid in advance
When we had a new cenrtral heating system put in the engineer did not expect to be paid until it was completed and working
When I test drive a car I do not pay a fee in advance
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“Estate agents do not get paid in advance”
Not completely accurate – the company I worked for used to charge a £150 or £250 up front, non refundable marketing fee
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They should be!
The problem we have in estate agency is that the vast majority of agents wilfully break the regulations not just in regard to Material Information.
Perhaps if NTELSAT had a report an agent section and actually did something about the reports they wouldn’t continually do it.
We take as long as it takes to get a property online to make sure that all Material Information is provided and that often involves numerous chasing of vendors to provide it, whereas some local agents seem to stick the property online within hours without it.
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Government initiatives have been woefully inadequate within the property market for as long as I can remember, and this is just one more. Talk about exposing agents to wayyyy too much information that only their selling customers or the conveyancers would know anyway.
(And on the subject of conveyancers, they are already the gatekeepers for anti-money laundering policing (yes, the money is already successfully into the multi billion pound banking turnover system by the time of their involvement but, on the limited resources of each legal business they are there to now protect the UK from money laundering) and now moving into surveying to advise on climate change (I know I know, but its actually true) so you might as well add in estate agency.)
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David I understand you have never worked in estate agency or conveyancing. I run an estate agency, in our area we are the fastest agent between sale agreed and exchange. How do we do this? A big part of it is ‘Upfront info’. Before we launch to market we prepare a Buyers Information Pack.
We try and include as much as possible in the pack:
Property Brochure (including photos, property description, square footage, £ per sq foot, whole plot size, local authority, council tax band and cost, tenure, estate fees, if lease the length, ground rent, maintenance fees and what’s included) –
Floor plan
Location map
Walk around video
Our general FAQ sheet about the property including things like rental value, rental yield, year built, distance to shops and park, meters, services, boiler, loft etc
A report on -[Local sold prices, Title plan, Local mobile & broadband speeds, Planning history, Plot size & floor area, Pounds per square foot, Flood risk, Conservation areas, Local school reports, Leasehold info, Council tax, Energy Performance Certificate, Transport links and Transaction history.]
Any Private estate or private road fees and information i.e. most recent invoices and share certificates.
Title Deeds – Office copy entries – Register
Title Plans – Office Copy Entries
EPC –
TA6 – Seller’s Property Information form
TA7 Leasehold Information form – We also suggest copies of the following, if applicable, (a) recent correspondence and invoices from the managing agents. (b) Share certificate in the management company. (c) Any consents from the Freeholder to matters such as the installation of double glazing which may well be required under the terms of the Lease.
TA10 – Fixtures and contents form
We have a Supplemental Enquiries Questionnaire – this form answers most of the questions that come up during enquiries, including parts on Conservatories
FENSA window certificates for windows installed after 1 April 2002;
Wall or loft Insulation paperwork;
Gas safe certificates;
Electrical work certificates;
Any building insurance claims and information;
Shared driveway or private road contributions;
Warranties, guarantees or receipts for any fixtures fittings or works done on the property, including kitchens and bathrooms;
Details on any extra land included;
Details on works done if a Listed building;
Boiler or heating documents or servicing records;
Solar panel / battery documents with proof of ownership and feed-in tariffs;
Info on extensions and conservatories with planning and building regulation info or council documents to say not needed, and as much info as possible;
Conservatory information – we have a form in our SUPPLEMENTAL ENQUIRIES QUESTIONNAIRE
Non-mains drainage and Septic tank documents, including servicing;
NHBC or new build paperwork if under 10 years old;
Burglar alarm documents and service history
If Leasehold: (a) Any recent correspondence and invoices from the managing agents. (b) Share certificate in the management company. (c) Any consents from the Freeholder to matters such as the installation of double glazing which may well be required under the terms of the Lease.
Swimming pool and heating apparatus service history
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I don’t know what area you operate in Shaun, but I can only assume you are either the only local agent or are a historically strong market leader. If I tried to introduce all that you list (other than the first paragraph, which is just a list of things that any decent agent should be doing) as upfront requirements to begin marketing, I would very soon find myself with no stock. Unfortunately, sellers do not see the advantage of all this upfront work, and are almost always looking for the “easiest and quickest route to market”. I well remember, when EPCs were first introduced, losing instructions to local back street agents because they were telling sellers that they weren’t required. Even now a local ex-countrywide agent is guilty of not providing EPCs until a sale is agreed. So long as the industry remains unregulated, such problems will continue to occur.
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We aren’t the only agent or have the largest market share. We are not the cheapest either. We explain this info needs collating – start the process now or leave it until after and delay the process. Some sellers give us minimal info some all of it.
As you know, one of the longest parts in any sale is waiting for enquiries to be answered – the more upfront info done the lower the number of enquiries = faster exchange. In Australia this is norm and has cut out 99.9% of enquiries – contracts there are exchanged in 3 weeks
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So you ask for it, but don’t do anything different if you don’t get it. Not exactly revolutionising the industry then is it.
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Most agents do nothing, we don’t force people to do it but explain how it works and many embrace it.
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Wouldn’t it be wonderful if buyers (the beloved ‘consumers’) had a few obligations themselves?
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I suppose what obligations do consumers have when they buy a car or a kettle? Also The Consumer Rights Act gives you the legal right to either get a refund for goods that are of unsatisfactory quality, unfit for purpose or not as described, or get it repaired – depending on how long you’ve owned it. Not for houses though.
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I guess they’re different types of purchases. Also, I’m really (how old fashioned am I?) talking about moral obligations, fool that I am!!!
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There isn’t any way of contacting all of the agents so other than doing what James Munro has done, including press stories on here in September 2015 there’s not much more NTSELAT could have done to educate the industry ‘professionals’ who have a defined duty of care and skill that PMA is out, CPR is in. The pathfinders of best practice have been doing what all agents will ultimately end up doing since 2020
Agents either need to become conveyancers, or they need to have conveyancers on staff or they need vendors to engage with their conveyancer from the outset of marketing.
Head in the sand, reluctant to change agents will resist the changes. A lot of agents will struggle to comply with MI regulations because only 21% of data feed systems to the portals allow compliance and then the portals are not 1 click- all info equipped.
When I look at letter of the law compliance rates, even with agents who are proactively trying their best to comply are not. The best of the MI data information suppliers doesn’t have all the information consumers are entitled to. The missing information can only come from the title documents which most agents are not geared up to get understand and interpret. Vendors will have t get used to the fact no sale no fee will only be available from agents prepared to carry the cost of full MI, otherwise the norm will be it costs to list their home. Something in the order of £150 on top of the charge for an EPC
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You dont need CRM or portal compliance – Agents can make MI available in the free text boxes or Property details PDFs.
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That sound terribly like a technical work around for the service suppliers and portals whose legacy tech cannot cope with the full set of data now required to be available within 1 click. Nearly 80% of feeds do not contain all the information for part A compliance. A full list of caveats and problems i free text boxesis hardly going to make great marketing and its still unlikely to address the bespoke nature of individual consumer considerations
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Not sure about work around – Trading Standards say – If you advertise properties for sale or to let you must ensure that material information is included in the property particulars. nationaltradingstandards.uk/uploads/Industry%20guidance%20for%20material%20information%20on%20property%20listings%20-%20July%202022.pdf
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Not putting data into data fields but a free text box because the software doesn’t have the data field is a work around.One where human error becomes a factor; either though omission or mistyping.
There are a minimum 196 data field for agents to consider now trying to shoehorn them into the 13 new field provided will lead to claims against agents.
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Are we just not needing HIP’s back. They will contain all the info.
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There are far more important areas where Trading Standards can become involved to improve the postion of housebuyers. Banning conditional selling and referral fees being the obvious two sins that are well within their remit.
With the additional benefit that were they to act on those two issues it is likely the house buying process would improve and speed up considerably, since the factory conveyancers that rely on the latter would hopefully find their ability to find clients squeezed and they would not be clogging up chains anymore.
I would love to hear James Munro being asked some questions on that subject?
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In the event ‘factory’ conveyancers did find their ability to source clients squeezed, where is it that you think that work would otherwise go? If the factory firms closed overnight, as some commentators would seem to hope for, your chains would be significantly more ‘clogged’ than they are now. It would take the market 5 to 15 years to create a different model. It is not as though there are thousands of small high street conveyancers sat twiddling their thumbs hoping for work that the factory firms are ‘stealing’ from them. Doing away with referral fees is not the silver bullet people seem to think it is and it would do little to nothing to damage the factory set up. The work will go where there is the capacity for it to be done .
For clarity, I work for a ‘factory’ firm and i’m not defending the model. The problems within the model are many but i’m yet to see anyone suggest a viable alternative.
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How many cases do your qualified sols/conveyancers at your factory firm deal with each at any given time?
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I don’t own the company and it’s commercially sensitive information i’m not comfortable disclosing but in my experience, it is substantially less than the figures I see speculated about. Also, that’s exactly my point – the factory firms already can’t cope with the work they have, so where is it that this work would suddenly go if referral fees were stopped.
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Do you feel all qualified sols/conveyancers should publish this data? I would love all conveyancers to charge more to enable them to take on more staff and tech to speed up the process. Many agents are happy to be included in the process and help collate info to reduce enquiries.
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I think there’s an argument for it and i’d be interested to see it. However, i’m not sure how useful it would be to most clients in terms of determining who to instruct. Sure, some would make a more informed decision but I think the majority wouldn’t know what to do with the data. You can already draw rough conclusions by looking at the Land Registry application data and then comparing that to the number of employees they list in their company accounts and the number of those employees that the various regulators list as being qualified – I appreciate not many clients will go to that trouble but the information is there if they want to look.
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I think that there are (some) agents who don’t fully grasp that there is a fundamental difference between the business models of agents and conveyancers. Many conveyancers are operating with razor thin margins, estate agents are the opposite, margins are large (per transaction) but there is a risk of not getting paid if the transaction falls through. It is therefore nonsensical to tell a conveyancer to work like an agent, and work for free in order to move the transaction along. It simply won’t happen because it does not make business sense.
Then there are some naïve commentators who say conveyancers should do more, but charge more also. Many clients simply will not pay unless they absolutely have to. Therefore, there is an incentive for agents to find the absolute ‘bare minimum’ solution, which will be poor quality information prepared either by a non-regulated legal company and/or AI. The quality will be so poor as to make them useless – as was largely the case with HIPs.
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The simple point here is that before a property is listed it should be purchase ready.
The NTS guidance states clearly that a Seller should instruct a Solicitor/conveyancer before the property is listed. In this way all relevant MI can be collated and the property is then ready for Exchange when the offer is accepted (just like an auction).
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Although wise. The guidance doesn’t state a seller needs to instruct a sol before listing it. TS say “The seller may have instructed a solicitor/conveyancer at the outset who can also help to verify the information in readiness for the property to be advertised” nationaltradingstandards.uk/uploads/Industry%20guidance%20for%20material%20information%20on%20property%20listings%20-%20July%202022.pdf
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I’ve been an agent for nearly thirty years and the only way I find to improve time to completion is to have a “pet” solicitor (or two) whom I give all my work to. They offer “no sale, no fee” to both buyers and sellers and the volume of work I give them means they have to pull their finger out in the conveyancing process. Slow completions (and as a result many fall throughs) can be laid directly at the door of useless solicitors. The legal profession is the only “customer facing” industry in the world that seems to give absolutely no credence to the concept of customer satisfaction.
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