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22/07 13 February 2007
The OFT has made a Warning Order against a former property sales manager who was working at the Earls Court branch of estate agents Barnard Marcus.
Conrad Whelan failed to disclose to his client that he was seeking to acquire a beneficial interest in his client's property. This was in breach of the Estate Agents (Undesirable Practices) (No.2) Order 1991.
Mr Whelan also failed to employ the statutory definition of 'sole agency' in the contract signed by his client, in breach of the Estate Agents (Provision of Information) Regulations 1991.
Ray Hall, OFT Director of Markets and Projects said:
'An estate agent must be particularly transparent and open with his client if he is seeking to acquire a personal interest in the property he is marketing. It is important for his client to know if the agent has a potential conflict of interest.'
1. The OFT can make a Warning Order if it satisfied that a person in the course of estate agency has failed to comply with a relevant 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 that relevant statutory obligation and/or continues that undesirable practice in the future.
2. Before a Warning Order is issued, 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.
3. An adjudicator appointed by the OFT determined that Conrad Whelan breached the Estate Agents (Undesirable Practices)(No.2) Order 1991 and the Estate Agents (Provision of Information) Regulations 1991. A Warning Order was made on 24 November 2006. The Order did not come into operation until the period in which any appeal under section 7(1) of the Estate Agents Act 1979 ('the Act') may be brought had expired. Mr Whelan had until 22 December 2006 to lodge such an appeal, which he failed to do.
4. After an Order has been made, the person affected can at any time, and on payment of a fee, currently £2,500, apply to the OFT for the Order to be varied or revoked. The OFT will then consider the request in the light of current circumstances.
5. The Act and related subordinate legislation 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.
6. The Estate Agents (Undesirable Practices)(No.2) Order 1991 provides that it is an undesirable practice for an estate agent to fail to disclose to his client promptly and in writing that he is seeking to acquire an interest in his client's property.
7. The Estate Agents (Provision of Information) Regulations 1991 ('the Regulations') provide that if any of the terms 'sole agency,' 'sole selling rights' or 'ready, willing and able purchaser' are used by an estate agent in the course of carrying out estate agency work, he must explain the intention and effect of the relevant term to his client by means of a written explanation having the form and content of the appropriate statement set out in the Schedule to the Regulations unless this would be misleading because of other provisions in the relevant contract.
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