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Regulation of Estate Agents Fact Sheet

Relevant or Related Legislation:

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

Current Position:

All estate agents in the UK who engage in residential estate agency work are now required by order to belong to an approved redress scheme dealing with complaints about the buying and selling of residential property. This and other measures to improve the regulation of estate agents came 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.
• 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.
• All estate agents in the UK who engage in residential estate agency work are now required to belong to an approved redress scheme dealing with complaints about the buying and selling of residential property.

Frequently Asked Questions (FAQs)

1. Are estate agents regulated?
   
   
2. What should I do if I have a complaint about an estate agent?
   
   
3. What is the Government doing to improve the home buying process?
   
   
4. 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 (buying and selling, but not letting).
• 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 receives 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.

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 enforce the legislation.

Consumers can also complain to a statutory redress scheme where the complaint is about residential property. Since 1 October 2008 all estate agents in the UK who engage in residential estate agency work have been required to belong to an approved redress scheme dealing with complaints about the buying and selling of residential property (including complaints about Home Information Packs).

The Office of Fair Trading (OFT) has approved the following bodies to run estate agents redress schemes:

• The Property Ombudsman (01722 333306 or www.tpos.co.uk)

• The Surveyors Ombudsman Service (0330 440 1634 or http://www.surveyors-ombudsman.org.uk/)

Residential estate agents must by law belong to one of the approved schemes. Estate agents that fail to join an approved scheme will be subject to a £1,000 penalty charge, which can be repeated if necessary, and will ultimately be banned from carrying out estate agency work if they refuse to sign up.

The statutory redress schemes are not be able to investigate complaints that took place before 1 October 2008, although they can investigate complaints about HIPS under the Housing Act 2004 redress provisions. Other complaints predating 1 October may also be investigated if the estate agent concerned was a member of a voluntary scheme at the time of the complaint. If you are unsure whether your complaint is in scope you should contact the redress schemes (see above). Consumer Direct (08454 040506 or www.consumerdirect.gov.uk) can also provide advice on how to pursue a complaint.

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 a HIP before putting their property on the market. 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 requiring estate agents in the UK engaged in residential estate agency work to belong to an approved redress scheme dealing with complaints about the buying and selling of residential property. The order requiring estate agents to sign up to such schemes came into force on 1 October 2008.

Other measures to improve the regulation of estate agents also came into force on 1 October 2008. These provide enforcers with increased powers to enter estate agents premises and inspect documents, and increase the grounds under which the OFT can issue warning and prohibition orders to estate agents.

We are planning to implement further provisions in CEARA 07 in 2011. We aim to introduce formal record keeping requirements for estate agents, who will be required to keep records of their transactions with consumers, including offer letters, for a period of 6 years. Keeping records will provide enforcers with audit trials and better evidence to prove misconduct.