Do estate agents have an obligation to find out whether the reason a vendor is selling their property is due to a divorce or partnership split?
According to Paul Offley, Compliance Officer at The Guild of Property Professionals, the answer to the question depends on whether this could ultimately impact the transaction and potentially cause delays.
“It goes without saying that agents are required to do their due diligence and find out who the owners are who are consenting to the sale of the property, but does the reason behind sale matter? It does if the reason could have an impact on the buyer’s decision to purchase the property,” says Offley.
He adds that there have been instances where a sale had been agreed and solicitors had been instructed, but it had come to light that the sellers were going through a divorce and the financial agreement between the sellers had not been finalised. As a result, the sale was delayed, and the buyer was unable to move at the date they needed to.
“The buyer claimed that they were unable to wait the length of time it would take to get the agreement finalised, and if they had known at the start it would be a potentially protracted sale, they would not have proceeded. As a result, they wanted to withdraw from the transaction and were seeking to cover the costs which they had incurred in terms of mortgage applications, solicitors, survey costs, etc,” Offley said.
Is that a reasonable claim?
Offley says that in terms of Consumer Protection from Unfair Trading Regulations 2008, a consumer would need to demonstrate that there was a piece of information missing, which would have materially impacted their decision to go with that transaction.
Only a court would be able to decide whether the claim would be successful or not, but it just goes to prove that more and more people are using that legislation to try and recover costs or make a claim against the agent.
“What steps can agents take to ensure they are covering themselves against such claims?” asks Offley.
“As part of an agent’s Anti-Money Laundering (AML) assessment, they need to assess the risk of the transaction and one of things they would look at is the reason for the property being sold.
“If the agent knows the property is being sold because of a divorce or partnership split, then it is worth taking that a step further and establishing whether there is anything they could possibly result in a delay to the transaction. This won’t necessarily help with AML but will help agents avoid CPR claims.”
Offley notes that another thing to consider is the buyer’s time scales. “When agreeing a sale with a buyer it is worth asking whether they have a strict time scale they need to complete by.
“While agents can’t be involved in setting those time scales, it will provide some guidance with regard to certain time constraints buyers may have.
“Establishing a reason for sale and how that could impact the transaction, will ensure that all parties are aware of all the information they require to make an informed decision, while ensuring that agents are protected from any potential CPR claims,” he concludes.
Another mix of legislation that demonstrates the legal house selling AND conveyancing system is no longer fit for purpose.
This article should come under buyer beware rules but ofcourse it would also come under Consumer Protection Rules now. It shows how the legislation has been added to over the years and is now a mismatch of rules.
The seller is under no legal obligation to tell agent or buyer they are divorcing, as far as I am aware, but the agent could be accused if misleading or incompetence under CPA!!!!
As the great David D’Orton Gibson says,’Whenever a government wants to do new housing law, they go out to Whitehall and find four people who know nothing about housing and get them to draft the legislation!’
(Apologies to David if that is a slight misquote, but that is certainly the gist of what he says!’
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I would argue that as an Agent we do have a need to know if there is a separation going ahead, as then we would know we need to get consent from both parties regarding offers/viewings etc. If it is a couple staying together, then there is the understanding that they will have discussed it and agreed a decision. If it is a separation however, you cannot trust that A has in fact spoken to B and they have accepted/rejected the offer. Also, one might be living elsewhere so copies of correspondence should go to both, rather than one letter sent out.
With probate cases, we ask if probate has been started/granted and if the person we are dealing with has the overall authority to make decisions, or if there are 25 beneficiaries who all have to agree.
We don’t need to know why, or who is doing what, we literally just need to know enough to allow us to do our jobs effectively.
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When I was an agent I wanted to know why I was there for a valuation
Was the vendor moving for
Schools
Work
just because they can afford to
Divorce
The required timescales affect the price I would recommend to market at
I also wanted to know if it was a divorce as they were usually a waste of time and something required by sols
We would charge to do a divorce val and say the fee will be taken off if they instructed us later.
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A question(s) for the BASPI or PIQ whatever you want to call it, so one for the Home Buying and Selling group to take forward.
1. What is the reason for the sale of your property?
2. Are there any factors which might delay the sale?
The question ‘Does the seller have any special requirements about a completion/moving date?’ is already on the form.
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I’ll point this article in the right direction Simon.
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H’mmmmmmm do you not get both parties to sign the agents contract to market. If not why not? This is basic stuff. You do have a legal duty to confirm ownership of the property before you can market. I can’t believe this story is happening, this is so basic estate agency that prevents these issues.
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