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OFT warns Manchester estate agent

124/07    28 August 2007

The OFT has made a Warning Order against Martin Corrick Levy, who trades as Scotts Estate Agents of 443 Bury New Road, Prestwich, Manchester, based on his failure to use statutory definitions to explain the terms 'sole agency' and 'sole selling rights' in his agency agreement as required by the Estate Agents (Provision of Information) Regulations 1991.

This follows an appeal by Mr Levy to the Secretary of State against a Prohibition Order made against him by the OFT on 3 February 2006. At the appeal hearing, the appointed persons found Mr Levy to be fit to carry on estate agency work and accordingly downgraded the Prohibition Order to a Warning Order.

NOTES

1. The OFT can make a Warning Order if it is satisfied that a person in the course of estate agency 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. An adjudicator appointed by the OFT determined that Mr Levy breached section 18 of the Estate Agents Act from his failure to comply with certain provisions of the Estate Agents (Provision of Information) Regulations 1991. A Warning Order was made on 13 June 2007. The Order did not come into operation until the period in which any appeal under section 7(1) of the Act, had expired. Mr Levy had until 11 July 2007 to lodge such an appeal.

3. 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.

4. The Estate Agents Act 1979 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.

5. Under section 18 of the Estate Agents Act, amongst other things, an estate agent must, before entering into any contract for estate agency services, give his client particulars of the circumstances in which the client will become liable to pay remuneration, and particulars of the amount of the agent's remuneration for carrying out estate agency work; or if this is not possible, details of the way in which it will be calculated.

6. The Estate Agents (Provision of Information) Regulations 1991 ('the Regulations') clarify and extend these obligations and explain certain terms. 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 shall explain the intention and effect of those terms to his client by means of a written explanation having the form and content of the statements set out in the Schedule to the Regulations. The statutory explanations must be used in the form set out in the Regulations unless this would be misleading because of the other provisions of the contract.

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