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Regulation of Estate Agents Quick Facts

Relevant or Related Legislation: 

Estate Agents Act 1979 and Property Misdescriptions Act 1991.
Consumers, Estate Agents and Redress Act 2007 (CEARA)

Current Position:

An Order requiring estate agents in the UK who engage in residential estate agency work to belong to an approved redress scheme dealing with complaints about the buying and selling of residential property was laid in Parliament on 1 July 2008. It will come into force on 1 October 2008. Other changes to the Estate Agents Act 1979 will also come into force on 1 October 2008.

Key Facts:

•   Estate agents have to comply with the Estate Agents Act 1979 and the Property Misdescriptions Act 1991 when they act for persons who are buying or selling property.

•   The Office of Fair Trading can ban persons from acting as estate agents if it considers them to be unfit to carry on estate agency work.

•   Complaints about estate agents should be directed to local Trading Standards Departments or the Office of Fair Trading. Advice on how to pursue a complaint can also be sought from Consumer Direct.

•   The Government is committed to reforming the home buying process in England and Wales.  Sellers are required to provide Home Information Packs (HIPs) when putting homes on the market.

•   Estate agents marketing a property requiring a HIP must belong to an approved redress scheme dealing with complaints about HIPs.

•   The Government is taking forward measures to improve the regulation of the estate agency market in the Consumers, Estate Agents and Redress Act 2007, which received Royal Assent on 19 July 2007.

•   From 1 October 2008 all estate agents in the UK who engage in residential estate agency work will be required to belong to an approved redress scheme dealing with complaints about the buying and selling of residential property.

Frequently Asked Questions (FAQs)

Q1. Are estate agents regulated?
Q2. What should I do if I have a complaint about an estate agent?
Q3. What is the Government doing to improve the home buying process?
Q4. What is the Government doing to improve the regulation of estate agents?

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Q1. Are estate agents regulated?

Estate agents are regulated by the Estate Agents Act 1979, which:

• Regulates the conduct of estate agents in the course of estate agency work. (The definition of ‘estate agency work’ does not cover the letting of properties.)

• Lays down the duties that agents owe to clients (such as the passing on of offers, handling money and giving details of charges) and to third parties (such as disclosure of a personal interest).

• Gives the Office of Fair Trading the power to issue warning or prohibition notices against those persons whom it considers to be unfit to carry on estate agency work. Any person that has received a prohibition notice (a ‘banning order’) will not be able to practise as an estate agent.

Estate agents also have to comply with the Property Misdescriptions Act 1991, which:

• makes it an offence to make false or misleading statements about property offered for sale.

Under the Housing Act 2004, estate agents in England and Wales, marketing a property requiring a HIP are:

•  required (by Order) to belong to an approved HIPs redress scheme. Agents not complying with this requirement face penalty charges (currently set at £200) and could be banned by the OFT from practising as an estate agent.

Q2. What should I do if I have a complaint about an estate agent?

If you have a complaint where you believe the estate agent has acted contrary to their duties under legislation, you should contact your local trading standards department (www.tradingstandards.gov.uk) or the Office of Fair Trading, which enforces the legislation.

Consumer Direct (08454 040506 or visit their website at www.consumerdirect.gov.uk) can provide advice on all consumer matters, such as your consumer rights and whether you are able to seek independent redress for your complaint.

Estate agents in England and Wales marketing a property requiring a HIP must belong to an approved redress scheme. This means consumers have access to redress for HIP-related complaints against estate agents. Further information on this can be found on the estate agents’ redress page.

In addition, the majority of estate agents voluntarily belong to the Ombudsman for Estate Agents (OEA) Scheme, which is devised to address unresolved disputes between member agencies and consumers who are actual or potential buyers or sellers of residential property in the UK.

The Ombudsman will consider complaints where it is believed a member agency has infringed a consumer's legal rights, not complied with the OEA Code of Practice, acted unfairly, or been guilty of maladministration (including inefficiency or undue delay). The Ombudsman cannot deal with disputes about surveys and/or valuations of properties.

Further information can be found at the OEA’s website (www.oea.co.uk), or by calling them (01722 333306).

Estate agent members of the Royal Institution of Chartered Surveyors (RICS) are required to belong to the Surveyor Ombudsman Scheme (SOS), unless they are members of another redress scheme. The SOS will investigate complaints against RICS members, including those related to estate agency work. Further information can be found at the RICS web-site (www.rics.org/newregulation) or by calling them (020 7695 1670).

Q3. What is the Government doing to improve the home buying process?

The Government is committed to reform of the home buying process in England and Wales in order to make the process quicker, easier and more efficient.

Home Information Packs (HIPs) were introduced in England and Wales on 1 August 2007 and now apply to all homes regardless of size put on the market. Sellers of properties need to have commissioned a HIP before putting their property on the market. Any estate agent in England and Wales marketing a property requiring a HIP must belong to an approved redress scheme. HIPs must contain an Energy Performance Certificate, searches and other documents including evidence of title. A Home Condition Report can also be included by sellers on a voluntary basis. Providing this information at the start of the house buying process will reduce delays and uncertainties experienced by both buyers and sellers.

Further information on HIPs is available from www.homeinformationpacks.gov.uk or from the Department for Communities and Local Government (who have policy responsibility for housing in England and Wales) at:
www.communities.gov.uk/housing/buyingselling/homeinformation/

Q4.What is the Government doing to improve the regulation of estate agents?

The OFT published a report on the estate agency market in England and Wales on 23 March 2004. The report concluded that the estate agency market works well in many respects, but there is significant consumer dissatisfaction with estate agency services and customers find it difficult to complain and obtain redress.

The Government responded to the OFT report on 22 July 2004, proposing a package of measures building on and strengthening the OFT's proposals. These measures were taken forward in the Consumers, Estate Agents and Redress Act 2007, which received Royal Assent on 19 July 2007.

The Act contains provisions, which when implemented, will require estate agents in the UK to belong to an approved redress scheme dealing with complaints about the buying and selling of residential property.

The Act will also implement measures to improve the regulation of estate agents by:

• Requiring estate agents to make and keep records, including records of offer letters, for a period of six years

• Giving the OFT and local Trading Standards officers powers to require access to premises and on-site production of records in a wider range of circumstances

• Expanding the circumstances in which the OFT can consider the fitness of an estate agent to practice, and issue prohibition or warning notices under the Estate Agents Act.

From 1 October 2008 all estate agents in the UK who engage in residential estate agency work will be required to belong to an approved redress scheme dealing with complaints about the buying and selling of residential property.

Measures providing enforcers with increased powers to enter estate agents premises and inspect documents and expanding the grounds under which the OFT can issue warning and prohibition orders to estate agents will also come into force on 1 October 2008.

For further details please visit the Consumers, Estate Agents and Redress Act web page.