The Office of Fair Trading have thrown a grenade today.
In the wake of the Government announcing that they are to repeal the Property Misdescriptions Act and amend the Estate Agents Act, the OFT have published new regulations today which bolster the Consumer Protection from Unfair Trading Regulations 2008 and the Business Protection from Misleading Marketing Regulations 2008.
The guidance is pretty clear in that it aims to continue to protect the house buying and selling public from false and misleading statements made by estate agents and, from here on, any company in the business of advertising properties for sale including private seller websites.
Another new aspect though is the insertion of ‘guilty by omission’ which means that agents (and all other property advertisers and websites) can no longer duck their responsibilities by keeping quiet about bad surveys, lower surveyor valuations, proposed building nearby to a ‘quiet’ property and the like. This is a GOOD thing albeit that buyers must surely also take some responsibility for ensuring that a property is as they wish it to be and should not just be totally reliant on advertisers’ statements?
But another surprising aspect of the regs and which does not seem to have filtered through to the estate agency industry as yet, is ‘4.18’ which states under its examples of ‘aggressive practices’ as now banned:
Does this mean that lengthy sole agency agreements (often as long as 16weeks plus further notice periods) are no longer permissible? It certainly seems that way and is, from our point of view, a welcome attack on the lethargy of traditional estate agency that catches the consumer within sole agency traps.
In particular, the sole agency trap is an even more cruel noose when it is associated with a tactic of ‘over valuation’ whereby an agent provides a deceptively optimistic valuation in order to secure a new instruction. By flattery almost. This happens far more than you might think. Many large organisations utilise this approach as a matter of policy!
The question of accurate valuations is, at last, covered specifically now also though:
‘When you gain new clients and instructions
• Advising a likely selling price in the market appraisal that is not based on a fair and honest assessment of current market conditions (but is quoted, for example, as a tactic to acquire the instruction).’
Let us hope that both of these clauses’ inclusion begin to ensure that agents behave more honestly and to the benefit of home buyers and sellers alike.
But, will all of these changes be policed? If not, what’s the point?
The full OFT regulations are here http://www.oft.gov.uk/shared_oft/estate-agents/OFT1364.pdf