Newsroom

Clearer contract terms for consumers selling homes through estate agents

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

164/06    21 November 2006

The National Association of Estate Agents (NAEA) has recommended model contract terms to its members following discussions with the OFT.

Draft model terms were submitted to the OFT by the NAEA to ensure that they meet the requirements of the Unfair Terms in Consumer Contracts Regulations. Following work with the OFT, NAEA has made a number of improvements to its model terms giving consumers a clearer and fairer deal including:

• provision of a separate agreement for each type of agency arrangement, be it sole agency, multiple agency or sole selling
• clarification of fees payable including VAT
• terms written in plain and intelligible language
• improved clarity concerning marketing and the use of 'for sale boards'
• improved prominence of arrangements for the settlement of fees.

Simon Priddis OFT's Senior Director Markets and Projects/Services, said:

'OFT is determined to ensure that consumers entrusting the sale of their house to agents get a fair deal. Clear and understandable language in agreements is vital in achieving this objective. We commend the use of the NAEA model terms as a way of ensuring that consumers do get a fair deal from agents.'

NOTES

1. The National Association of Estate Agents (NAEA) is the UK's leading professional body for estate agency, representing the interests of over 10,000 members who practise across all aspects of property services in the UK. These include residential and commercial sales and lettings and property management.
 
2. The Unfair Terms in Consumer Contract Regulations (UTCCRs) came into force on 1 October 1999 and replaced the 1994 regulations. The regulations implement an EC Directive (EC Directive 93/13) in the UK. UTCCRs apply to standard contract terms used with consumers in contracts made after 1 July 1995. The Regulations say that a consumer is not bound by a standard term in a contract with a seller or supplier if that term is unfair. They also give the OFT and other Qualifying bodies powers to stop the use of unfair standard terms, if necessary by obtaining a court injunction. Ultimately only a court can decide whether a term is unfair.

3. The OFT market study - 'Estate agency market in England and Wales' identified a need for and recommended clearer contract terms for estate agents, NAEA model terms should assist in improving clarity in contractual arrangements. The OFT's publication 'A quick guide to buying or selling your home' recommends that buyers and sellers check whether an Estate Agent is a member of a trade association such as National Association of Estate Agents (NAEA).

Download Estate agency market in England and Wales (pdf 544 kb)
Download A quick guide to buying or selling your home (pdf 242 kb)

Back to:2006