Newsroom

Greater clarity on buying and selling via property retailers

OFT issues new guidance on what constitutes estate agency work

228/05    13 December 2005

The OFT today published new guidance on what constitutes estate agency work for the purposes of the Estate Agents Act.

The guidance is intended to provide greater clarity and consistency for consumers and businesses and has been collectively agreed by the OFT, the Trading Standards Institute (TSI) and the Local Authorities Coordinators of Regulatory Services (LACORS) as well as receiving the support of trade bodies within the sector.

There are currently about 200 internet property retailers trading in the UK. Some of these claim not to be engaging in estate agency work when in fact many do appear to fall within the legal definition. As a consequence, some customers who are already signed up to sole agency agreements with traditional high street agents have found themselves having to pay two sets of fees (one fee to the high street agent and another to the internet property retailer) after selling their property via such a property retailer, even though the property retailer advertised itself as not being an estate agent and assured the client they would not have to pay a fee to their original agent.

The guidance sets out examples of the types of activities carried out by property retailers that are likely to be carried out for the purpose, either of introducing a client to a prospective buyer or seller of property, or bringing such an introduction to a successful conclusion. These are likely to fall within the definition of estate agency work as set out in the Act, and include:

• providing clients with a 'For Sale' board and/or putting it up outside their property, particularly where the board contains the property retailer's contact details
• receiving and fielding queries from potential sellers or buyers and passing on details to their clients
• sending out property particulars and arranging viewings.

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

'All those involved in estate agency work owe duties to their clients and must not mislead consumers. Today's guidance, produced in agreement with our regulatory partners, provides clarity in an important and growing sector within this market.'

Ron Gainsford, Chief Executive of the TSI, said:

'Buying and selling property is a consumer's biggest transaction and is always going to require financial diligence and professional support. There can be no scope for confusion or uncertainty and I have been delighted to see the Institute working with our colleagues at the OFT and LACORS, alongside industry representatives, to provide additional important guidance to assist all those involved. The property market is forever a fluctuating one in which selling and buying practices will change and initiatives emerge. By working collectively we can provide clarification and address issues that require improvement or remedy in the best interests of consumers and best industry conduct.'

Derek Allen, Executive Director of LACORS, said:

'LACORS welcomes the publication of new joint guidance for property retailers who use the internet to advertise properties. This guidance will support the good work that local authorities already do to protect consumers while they shop for homes, which is probably the most expensive purchase they will ever make.' 

NOTES 

1. 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.

2. If a seller of a property enters into a sole agency agreement with an estate agent, no other agent has the right to sell the property during the period of the agreement. The seller can sell the property himself without paying the agent a fee - provided that the buyer was not introduced to the seller by the agent during the contract period.

3. The OFT can ban from estate agency work a person who has been convicted of certain specified offences such as fraud, or other dishonesty or violence; or who has committed racial or sexual discrimination in the course of estate agency work; or who has failed to comply with the requirements placed on estate agents by the Estate Agents Act.

4. Before a Prohibition 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.

Back to:Press releases