A leading barrister has raised several questions about the duties owed by online estate agents to their customers.
In the Opinion, prepared for the UK PropTech Association (UKPA), Ian Rees Phillips of 6 Pump Court explores how the nature of up-front payment for estate agency services may create a conflict of interest between the online estate agent and property vendors.
The opinion concludes that the online agents owe a fiduciary duty to home seller clients and that there is a “significant danger that breach of fiduciary duty is baked into the online estate agent model”.
Those online agencies who operate with self-employed agents in the field are in even more “danger” of their clients “bringing a claim” against them.
Eddie Holmes, chairman of the UKPA, said: “It is extremely important that founders operating new business models, enabled by technology, bear in mind the legislative environment in which they operate. The world of PropTech is no different to any other in this regard.
“This Opinion by Mr Rees Phillips serves to highlight some fundamental questions about the online agency business model.
“We urge those businesses operating in this space to consider these questions as a matter of priority and communicate what steps they take to protect their customers – something which should, ultimately, help those businesses create competitive advantage for themselves.”
Online agent Russell Quirk, of eMoov, said: “It should be noted that not all online and hybrid agents are the same.”
He said that eMoov employs all its staff full-time, “whereas a number of our rivals rely upon using self-employed contractors that may perhaps be, say, driving a taxi one day, then listing homes the next.
“We are grateful to the UKPA for highlighting issues which go to the core of our own belief in providing the best service we possibly can to our customers.”