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What estate agents have to tell you – changes to the law

The law now demands more clarity from estate agents when dealing with clients - find out what they have to disclose and demand to be kept in the know.

October 22, 2013

Sarah* had spent £800 and invested a lot of time and mental energy into buying her dream house when suddenly she had to call the whole thing off because she found out the house was subsiding.

She knew there were uncertainties involved in buying a house but hadn’t expected anyone to deliberately mislead her into buying something under false pretenses.

It turned out all three of the houses in the terrace had been underpinned and her estate agent had hidden this from her because he knew it would put her off.

Up until recently the law was not on Sarah’s side – the buyer had the responsibility of finding out if a property was faulty and if they didn’t ask, the estate agent wasn’t obliged to point out problems.

But, as of this month, the 1993 Property Misdescriptions Act (PMA) has been scrapped and estate agents now have to comply with much stricter measures under Consumer Protection from Unfair Trading Regulations (CPRs).

The law applies to estate agents, property developers and websites that introduce buyers to sellers. If any of these are deemed to be acting unfairly they can be issued limitless fines and individuals and imprisoned for up to two years.

Paula Higgins CEO of Homeowners Alliance welcomed the changes. “Although there are a lot of estate agents that act fairly we have heard too many stories in the past about ones who’ve exploited loopholes and taken advantage of their clients.

“It’s good to see the law adapting and updating itself and we hope this will result in a better deal for homebuyers and sellers,” she said.

What do these changes to the law mean for me?

CPRs mean that estate agents now have to disclose “fair” information to homebuyers and sellers. That includes making “material information” about a property clear, unambiguous and not deliberately misleading or withholding information from buyers.

It also stipulates that estate agents must be honest about their credentials, and not falsely claim that they are part of a professional body or redress scheme.

They must provide “accurate descriptions of properties they are marketing”, that means pictures of the property should be realistic – so no spending hours looking for the one angle that doesn’t show the motorway at the end of the garden.

A number of things can now be classed as withholding information from buyers. For example, not revealing planning permission or development in the area or proximity to a power station or sewage works is illegal and could result in prosecution.

The law also calls for “open, honest, clear and timely sharing of relevant information”. So no hiding information from buyers until it’s too late.

And if a number of sales have fallen through agents now have to find out why and alert the buyer.

This means situations like Sarah’s (mentioned above) will be less common because buyers are more likely to know about problems before starting the process.

Local schools, night clubs or halfway houses also have to be mentioned, as do neighbours with ASBOs and whether there have been burglaries in the area. Buyers also need to know whether there has been a murder or suicide in the property.

But the OFT warns that estate agents act for the seller, not the buyer and recommends that homebuyers contract their own solicitor or licensed surveyor to act for them. The OFT has also issued information packs on the process for both homebuyers and sellers.

However, Mark Hayward, managing director of the National Association of Estate Agents, said he had reservations about the guides. “We welcome the guidance document on compliance with Consumer Protection Regulation, but we believe that the unique and important nature of property purchase means consumers deserve further, stronger protection.

Hayward suggested when the guidance was first published that it should be used in conjunction with the now defunct 1993 Property Misdescriptions Act (PMA). “We have long advised that both pieces of legislation could exist concurrently to the benefit of the consumer,” he said.

The OFT say consumers should take control of the situation by doing their own research into the buying process, being clear with estate agents about their requirements and keeping written records of conversations about buying the property.

Buyers can now expect estate agents to investigate potential problems they think might become an issue, such as suspicions of damp or probable leaks. Although it may be hard to prove that your estate agent had a suspicion unless they specifically tell you so.

They also have to mention Green Deal loans (which allow owners to make improvements to the property and then pay them back with the savings on their electricity bill), because these debts are passed on to new owners.

Other practices that are considered unfair include putting buyers under undue pressure to skip the survey, raise their offer or exchange contracts. Estate agents should also offer their own complaints procedure.

If you think your estate agents are acting unfairly but you are not sure what to do,  then take a look at our guide on How to resolve disputes with estate agents. The guide for buyers is coming soon.

*Names have been changed.

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26 Comments

  1. Hi Ruth,
    Thank you for your reply. The contract says I would be eligible for a fee should an introduction be made during the contract period. But nowhere does it imply that this info would be held from me (indeed, what would be the point of hiring an estate agent if they did?).
    The TPO process has regulations to avoid this happening – they should have told me about future obligations. The law says that EAs must abide by the rules of their own own regulatory body, but the TPO herself only gave them the smallest slap on the wrist. I used to think the word “Ombudsman” had some integrity so it is disappointing to learn the rules are meaningless and EA’s can still make a very tidy profit even when they are proven to deliberately break them. It is in their interest to lie, and profit, and receive no penalty.

    Comment by Ruth — June 8, 2018 @ 8:51 am

  2. Hi Ruth, Have you taken a look at the contract you have signed with the estate agent? My guess is that there was something in the small print which says that you would be liable for commission. We agree that this is not a consumer friendly practice at all and will continue to lobby for change. You can see all our campaigns here – https://hoa.org.uk/campaigns/.

    Comment by Paula — June 7, 2018 @ 5:08 pm

  3. Hello, I am in dispute with my estate agents. They are trying to claim their full fee on someone they never told me about. The buyer (Mr. X) made an enquiry with them but later changed his mind. Months later he bought from me direct when I was outside of contract. I knew nothing of their earlier connection until their demand for a fee.
    Is it illegal for an estate agent to claim a fee on a buyer who they never told you about?
    According to the TPO guidelines, EAs are supposed to inform seller of any potential future obligation (they did not); but when I raised the complaint with TPO their response was to just knock a tiny fraction off the fee. I’m shocked that the TPO think this is fair outcome – I wouldn’t have sold to this buyer had I known a fee would be due (already dropped price low as I could afford).
    Also, I recently met somebody else who had an identical story. If this withholding of info is common practise I am concerned that I have no legal standing to complain.
    Either way I will never use a highstreet EA again…. Feel so betrayed by both the EA and by the TPO…

    Comment by Ruth — June 7, 2018 @ 4:18 pm

  4. Hi Sam, No it’s not illegal. In relation to your experience, it’s only illegal not to pass an offer onto the vendor and to fabricate an offer. Have the conversations you have had with the estate agent been conducted over the phone? If so I would ask the estate agent to put these counter offers in writing and ask they give you evidence that the counter offer is for real? See https://hoa.org.uk/services/ask-an-expert-2/ask-an-expert-i-am-buying-questions/how-do-i-know-third-party-offer-is-real-and-not-the-agent-trying-it-on/
    In addition to that, here’s what the TPO Code of Conduct says for estate agents and passing on offers:
    9e)You must keep all buyers who have recently made offers
    through you, and which have not already been rejected,
    informed of the existence of other offers you have submitted
    to the seller.
    9f) You must be fair and not misleading when disclosing the
    amount of any offers made to other buyers. Before disclosing
    the amount of an offer, you must advise the seller of such
    intention and get the seller’s agreement; and you must warn
    all buyers who make offers that it is your practice to do so. If
    you do disclose any offer to one buyer, then all offers must be
    immediately disclosed to all buyers with a current interest in
    negotiations for the property.
    9g) After an offer has been accepted subject to contract, you must
    promptly tell that buyer if the seller accepts another offer.
    9h) By law you must not misrepresent or invent the existence, or
    any details, of any other offer made or the status of any other
    person who has made an offer. If you know that the seller has
    instructed a legal representative to send a contract to an
    alternative buyer, you must then tell your buyer in writing.
    I hope this helps.
    Angela

    Comment by AKerr — June 5, 2018 @ 1:55 pm

  5. Hi
    I’ve recently put an offer on a house it was rejected. I asked the agent to keep my offer on the table with the vendors as I am a cash buyer with no chain. 3 days later the EA tells me they’ve received another offer which has also been rejected. I feel this puts my offer in not too bad a position as it’s obvious both offers are considerably lower than the vendors had hoped for. A week later the EA calls again to say they’ve received a higher offer from another buyer and ask if I can raise my offer. I raise by £15k, they submit the offer. The next day I get a call to say they’ve received another for £470k – my question is – are they legally allowed to disclose the other offer?? I thought this was illegal! I of course felt under pressure so raised my offer again – as it stands the I’ve been informed the vendors are still ‘considering my offer!’
    Many thanks
    Sam

    Comment by Sam — June 4, 2018 @ 3:42 pm

  6. Thanks Michelle. It’s not illegal for them to advertise the home again and there isn’t an obligation on the seller or estate agent to set out everything about the property in that advert. But the estate agent is obliged to tell prospective buyers anything material that may affect their buying decision and they should do this before they take the time and effort to come and view. So now the estate agents are aware of the mineshaft they must inform people viewing the property in future. You might just send them an email reminding them of this duty of care and to avoid people spending money unnecessarily in future. If you suspect, or better have evidence, that the agents knew about the mineshaft in advance of your viewing, you could make a formal complaint or let us know and we’ll refer it onto the regulator. Likewise if you feel the estate agent fobs you off, get in touch with us again. In the meantime, we are trying to get homebuyers better information, earlier in the process and have been campaigning for just this. See https://hoa.org.uk/campaigns/end-home-selling-chaos/

    Comment by AKerr — March 27, 2018 @ 7:26 pm

  7. Hi Phil. You should inform the estate agent who should pass this information on to the sellers and prospective buyers before a viewing. Do let us know what the estate agents says. If you get fobbed off we’d like to know so we can inform the Regulator. Angela

    Comment by AKerr — March 27, 2018 @ 7:23 pm

  8. Hi my son has recently pulled out of a house because he had a mine search done off his own back and was told there is a mine shaft under kitchen. He pulled out because we could not find out if it had been capped off. The house is back on market and they are not telling buyers about mine shaft. I am angry as my son so easily could have bought house then may not be able sell it. Should they advertise the mine shaft?

    Comment by Michelle mirse — March 23, 2018 @ 8:27 pm

  9. I was a tenant in a property in Northwood Middlesex and we had huge problems with damp in the house which shorted out the electricity. Rather than fix the problem after we reported it we were given a termination notice by the landlord who stated he had decided to sell. One wall in the dining room was particularly badly affected and the plaster was badly damaged. To fix the problem all of the plaster should have been removed and damp proofing should have been injected into the wall which should then be allowed to dry out for 4-6 weeks before the electric sockets were reconnected and new plaster applied. On the day we moved out of the property the landlord had a builder plaster over the damage and reconnect the electrical sockets that previously had water streaming out of them. I am concerned that the landlord is trying to cover up the issue and any potential buyer will be unaware of the issue. There was also a leak in the conservatory roof during our tenancy which the landlord patch fixed by injecting expanding foam (this is a porous material and will eventually let water in). We also suspect that the roof or loft bay window is leaking.
    My question is as the owner is selling and is attempting to cover up these issues how do I inform potential buyers of the issues? Should I contact the estate agents handling the sale to ensure potential buyers know what they are trying to hide? Does the owner / seller have a legal obligation to inform buyers of the issues?

    Comment by Phil Rogers — March 21, 2018 @ 12:41 pm

  10. Thanks Bob. It’s not illegal for them to advertise the home again on Rightmove and there isn’t an obligation on the seller or estate agent to set out everything about the property in that advert. But the estate agent is obliged to tell prospective buyers anything material that may affect their buying decision. So now they are aware of the historical subsidence they must inform people viewing the property in future. You might just send them an email reminding them of this to avoid people spending money unnecessarily in future. If you suspect, or better have evidence, that the agents knew about the subsidence in advance, you could make a formal complaints but it looks like you don’t want to do that. Here are details about how to complain -https://hoa.org.uk/advice/guides-for-homeowners/i-am-selling/how-to-resolve-disputes-with-estate-agents-a-guide-for-sellers/ – it starts with asking the agent for their complaints procedure. But be aware as a buyer you aren’t actually in a contractual arrangement with the estate agent. They are there to serve the interests of the seller who pays them to market the property. In the meantime, we are trying to get homebuyers better information, earlier in the process and have been campaigning for just this. See https://hoa.org.uk/campaigns/end-home-selling-chaos/

    Comment by AKerr — March 8, 2018 @ 1:13 pm

  11. I recently commenced the purchase of a property which I saw advertised on Rightmove. I subsequently discovered that it had historical subsidence and underpinning and as a result pulled out of the deal. This cost me surveyors and solicitors fees for the initial work done. I challenged the estate agents Pearsons of Hythe who said that, if they had been aware of the issue, then they would have mentioned it to me. I would not even have viewed the place if I had known of this. The house was withdrawn from the market after I my offer had been accepted but now, after I have pulled out, it is back on Rightmove http://www.rightmove.co.uk/property-for-sale/property-49597011.html and still there is no mention of subsidence in the particulars. I think that this is illegal but to whom should I report the issue and can this be anonymous – Hythe is a very small town and I am very likely to bump into the agents when I eventually buy another place and move into the area.

    Comment by bob — March 8, 2018 @ 11:53 am

  12. Hi Joy,
    What a shock! So sorry to hear about this. It sounds like this is something that should have been picked up by your conveyancer, the estate agent and your seller. Take a look to see what was said on the property information form (TA6/7) – they are required to complete it truthfully. You can start the process by complaining to the estate agent – see our guide here – https://hoa.org.uk/advice/guides-for-homeowners/i-am-selling/how-to-resolve-disputes-with-estate-agents-a-guide-for-sellers/. But do consider joining us so our home helpline advisers can go through the various options with you. Our legal advice line can help you decide whether you want to go further and take legal action. Here you will find a little more about the benefits of membership – https://hoa.org.uk/services/join/. Paula

    Comment by Paula — January 2, 2018 @ 1:52 pm

  13. Recently discovered through my own efforts that a property we were in the process of buying was very close to a field where planning permission had just been granted for 166 homes, build to start in spring with a duration of at least 4 years. Do we have any redress?

    Comment by Joy — December 2, 2017 @ 8:47 am

  14. Hi Katy,

    Initially you may wish to pursue the RICs complaints procedure as they are responsible for ensuring that their professionals and firms meet the requirements of their Rules of Conduct. If you get no resolution here you could consider taking the surveyor to court, you may even be eligible for legal aid if you meet the relevant criteria since the surveyor missing a structural issue could be deemed professional negligence. If you were to become a member of HOA our Helpline staff can assist you further and you would also benefit from access to a legal advice line service to discuss your legal options.

    best wishes,
    Sophie

    Comment by Sophie Khan — September 29, 2017 @ 3:01 pm

  15. Hello, I wonder if you can help me please. I asked for a structural survey in a coal mining area. I have purchased a 1954 built bungalow, now found to contain grade 2 level red ash. We found this out because of the amount of damp we have had to deal with, no DPM, but more importantly, that there is a 120mm drop over an 8m stretch, when using a spirit level. This was never picked up on our survey.. the surveyor stated that ‘where measured floors and walls were level’. ~Clearly this is not the case, and a builder who was supposed to do some work for us, insisted we have the test done before work cud commence. I now have to vacate my property and spend over 23 thousand pounds of my own capital to put this right, and hopefully not more. The surveyor I used is RICS so he has indemnity insurance. Would he be liable for this at all, as this is a mining area in cannock, west midlands. He was recommended to me by the estate agent selling the property. I was a cash buyer, so there was no need to check for red ash for a mortgage, Much appreciated for your response on this matter. Kind regards Katy Le Sage

    Comment by katy le sage — September 29, 2017 @ 9:59 am

  16. That’s terrible news, Mark. The estate agents should have marketed it as a 2 bed if it hasn’t got proper consents for use as a bedroom. Maybe they weren’t made aware by the vendor. There are options like indemnity insurance – see https://hoa.org.uk/services/ask-an-expert-2/ask-an-expert-i-am-selling-questions/selling-without-building-regulations/ . Without having more details, all I can advise is speak to your solicitor/conveyancer for advice. Angela

    Comment by AKerr — September 11, 2017 @ 10:17 am

  17. We were about to exchange on a so called 3 bed house which was marketed as such however it is indeed a 2 bed with loft room as there is no planning or building regs? The agents are not coming up with a solution and the vendors will not lower the cost?! I am about to be homeless as I need to be out of my house in a week? We also pulled out of another house because this one was a 3 bed? We are now out of pocket, lost a house and now potentially homeless

    Comment by Mark Price — August 30, 2017 @ 11:31 am

  18. Buying or selling my advice is never trust an estate agent.
    They often hide the truth in sneaky ways and if they get caught out they deny knowledge of the subject and claim that they were misinformed or mislead themselves. Remember, the bottom line is that an estate agent is there to make money, and not to do you any favours. In most cases things go fine and you would be better picking one that you have personal knowledge of or someone you trust has knowledge of. Remember, even the best and most well know still get it wrong as I learned to my cost.

    Comment by David — July 27, 2017 @ 8:27 am

  19. P. S.. Sorry to hijack the postings but (!) they even told us they’d had a asbestos clearance when they bought it 2 yes ago (2015). Our surveyors report states asbestos roofing to rear. He also clearly states that the house is without any doubt well over market price (even the £17k we reduced buy) due to the huge concerns. He also agrees with a survey done 8 yrs ago that the house has recent movement and coukd potentially require underpining and be ‘cash buyers only’ status…. Again!! We are so concerned that someone wilil take this house on without the full expertise of a full building structural survey. Surely the estate agebt has to let potential buyers know the information he has full details

    Comment by LC — April 14, 2017 @ 12:29 am

  20. This is so interesting to see. My first search regarding it too! Exactly same happened to us this month. We saw property online. House looked great. Substantial property. Images beautiful via online estate agents. We requested extra pics for rear of property and garden. But rest house looked stunning. These showed a very neglected area. We travelled 400 miles in the day to view. Huge surprise walking in. House woefully different to online photos. We could see huge potential though and put in a £20k reduction offer. £17k was accepted. Buyers showed us varying aspects of paperwork supporting soundness of house. We spoke about cracks/ing.. Felt reassured. Enlisted an excellent structural survey. £840! Plus £160 mining search. Survey back this wk. Huge huge issues!! We withdrew offer. Kept buyers in loop all times. Then our final reasons giving sympathetic advice we’d received that active movement shoukd be monitored for 6-12 months, areas of structural damage, and weaknesses recorded by surveyor. We had no responding message back but same day, and after WE’D TOLD the dealing local agent, it’s back on market this week for same price and no amendments to blurb. It’s a mugs game. £1000 lost for us. And potential naive buyer could be buying a pup. Surely it needs to be clear and a fair overview of a concerning house?

    Comment by LC — April 14, 2017 @ 12:20 am

  21. Buying a property but just discovered it’s of Non Standard Consruction,
    Should the agent have informed me before I got a surveyor in

    Comment by Gail Smith — April 26, 2016 @ 6:53 pm

  22. Not sure you can help me on this one I’m bidding for a house I understand the agents can’t tell me what the highest bid is.but could he someone had bid higher than me to get more money from me

    Comment by Carol Brocklebank — March 14, 2016 @ 8:03 pm

  23. Not sure if you can help me on this one .im bidding on a house .i understand the agents can’t tell me what the highest bid is .but what I would like to know if I bid the highest amount .would he say someone had bid higher just to get more money from me

    Comment by Carol Brocklebank — March 14, 2016 @ 7:54 pm

  24. Do estate agents have to give my name to the seller

    Comment by Nudge — March 1, 2016 @ 2:18 am

  25. I was purchasing a property, had survey done, solicitor did searches and found there had been subsidence done on the property 20 years ago. The vendors, family member of deceased person and solicitor claim they did not know this about the property. Paperwork could not be found and then surprise, paperwork was found. This was not informative, more receipt like, no confirmation of where or how much subsidence had been done. I withdrew my offer. Subsequently, the property is back on the market and no mention of subsidence in the particulars on line. Somebody has phoned up and was not informed of
    The subsidence. Are the estate agents acting unlawfully?

    Comment by Sue cook — November 18, 2014 @ 7:54 am

  26. Should the particulars of a property state that a property is Grade II listed if it is and also if it is in a conservation area?

    Comment by Shelley Aitkenhead — July 25, 2014 @ 2:42 pm

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