OFT decides to warn South London estate agents

Since this press notice has been published, the leaflet referred to has been taken out of circulation.

167/05 5 September 2005

The OFT has decided to make a Warning Order against South London estate agents Lynx Estate Agents Ltd, that if they continue to engage in certain specified practices they will be banned from carrying out estate agency work. The OFT has also decided to make a similar Order against the company's managing director, Bruce Burkitt. These Orders will not come into effect until the end of an appeals process (see note 4).

If they again engage in the misconduct specified after the Warning Orders have become effective, this would be treated as conclusive evidence that they are unfit to be allowed to continue in estate agency work.

An adjudicator determined that the company, which operated from offices in West Norwood, Tooting and Streatham, failed to disclose to a client that it knew that the person seeking to purchase a property it was marketing and the seller of a property it was marketing was both a relation of Mr Burkitt and an employee of Lynx Estate Agents Ltd.

Christine Wade, OFT Director of Consumer Regulation and Enforcement said:

'Estate Agents must be transparent with buyers and sellers if they or persons connected with them stand to profit from the sale of property they are marketing. It is important for consumers to know if the agent has a potential conflict of interest.'

The OFT has decided to ban six estate agents and to warn three estate agents and two estate agency businesses so far in 2005.

Download A quick guide to buying or selling your home (pdf 242 kb) which gives advice to consumers about using an estate agent. The leaflet is also available from the publications/consumer leaflets/general consumer rights area of the site.

NOTES

1. The OFT can make a Warning Order if it is satisfied that a person in the course of estate agency work has failed to comply with a statutory obligation or has engaged in a practice which has been declared undesirable by the Secretary of State. The OFT can bar from estate agency work a person who fails to comply with the Order and/or continues these undesirable practices in future.

2. The Estate Agents Act 1979 covers anyone who, in the course of business, is engaged in 'estate agency work'. This means introducing to someone else a person who wishes to buy, sell or lease land or property, and being involved in negotiating the subsequent deal. The work must be in the course of business, whether as employer or employee, and as a result of instructions from a client. The land or property may be commercial, industrial, agricultural or residential. This does not include acting as a letting agent.

3. Before a Warning Order is made, the person concerned has the right to make representations to the OFT as to why the Order should not be made. If these representations are unsuccessful, subsequent appeal can be made to the Secretary of State for Trade and Industry.

4. An adjudicator appointed by the OFT determined that Lynx Estate Agents Limited and Bruce Burkitt breached the Estate Agents Act 1979 and the Estate Agents (Undesirable Practices)(No.2) Order 1991. Warning Orders were made in respect of Lynx Estate Agents Limited and Bruce Burkitt on 22 August 2005. The Orders shall not come into operation until any appeals under section 7(1) of the Estate Agents Act 1979 and any further appeals, have been determined, or the period in which such appeals may be brought has expired. Lynx Estate Agents Limited and Bruce Burkitt have until 20 September 2005 to lodge appeals.

5. Section 21 of the Act requires an estate agent to disclose to prospective purchasers that a connected person has a personal interest in the sale of a property. A connected person includes an employee and an associate of the estate agent.

6. Under the Estate Agents (Undesirable Practices)(No.2) Order 1991 (paragraph 2(b) of Schedule 1), an estate agent must disclose to his client promptly and in writing that he knows that any connected person has, or is seeking to acquire a beneficial interest in the land or in the proceeds of sale of any interest in the land.

7. It should be noted that proceedings under the Estate Agents Act 1979 are not the same as those of a court and the adjudicator's findings are not the same as convictions by a court. Therefore, where the adjudicator finds that an offence has been committed or a provision of the statute has been contravened, it does not mean that the person concerned has been convicted under court proceedings of that offence or of that contravention.

8. A public register of Prohibition Orders and Warning Orders is kept by the OFT at the Consumer Credit Licensing Bureau, 3rd Floor, Craven House, 40 Uxbridge Road, Ealing, London, W5 2BS. Enquiries can be made to the Consumer Credit Licensing Bureau on 020 7211 8608.

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