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Under offer
Estate agents and their claims have long been the subject of
scepticism.
If false claims are made then although the net which can now
catch agents includes the new Unfair Commercial Practices Directive
(to be implemented Spring 2008) and the Fraud Act 2006, the Office
of Fair Trading (“OFT”) can also take action with a view to banning
a person (including a company or partnership) from estate agency
work. The ban comes in the form of a Prohibition Order.
“Banning” orders
An agent can be subject to a “banning” order for any of the
following reasons:
- Conviction of certain specified offences such as fraud,
dishonesty or violence
- By committing racial or sexual discrimination in the course of
estate agency work
- Failure to comply with the requirements placed on estate agents
by the Estate Agents Act 1979 and its associated regulations
- Engaging in specified undesirable practices
- If an adjudicator finds that the agent is unfit to act as an
agent
Real life examples
Low price for a quick sale
On 9 March 2007, an estate agent received a banning order from
the OFT after he had been convicted of offences involving
dishonesty. He was found guilty of two offences under the Proceeds
of Crime Act 2002.
More specifically, the estate agent bought a property for less
than a third of its value despite knowing or suspecting that the
owners of the property had bought it with the proceeds of
crime.
Ideal opportunity for renovation
In autumn 2007 two estate agents were made the subject of
prohibition notices after being declared “unfit to carry on estate
agency work generally”.
One of the agents failed to tell a potential buyer that she was
the owner of a property, which her agency was selling. She had not
revealed the information, even when challenged by the potential
buyer.
As a result of this omission, two directors and the company were
found to have breached the Estate Agents Act 1979 in that they did
not “disclose to a client promptly in writing, that they have, or
are seeking to acquire, a beneficial interest in the proceeds of
sale”.
Sea view from some windows
Under the new Consumers Estate Agents and Redress Act 2007
(“CEAR”), which is expected to come into force in April 2008, the
redress provisions require all estate agents to join a redress
scheme approved by the OFT.
When implemented, the redress provisions will replace those in
the Housing Act 2004 requiring estate agents in England and Wales
to join approved redress schemes dealing with complaints about Home
Information Packs (“HIPs”).
Already 80 per cent of estate agents have joined the Ombudsman
for Estate Agents scheme following the introduction of HIPs. Once
the redress provisions of the CEAR are in force, any estate agent
who does not join a redress scheme faces being fined and
potentially banned from practising.
Estate agents must not only now work to a high professional
standard but they must also be able to show by their records that
their standards are top quality.
For more information or advice, please contact Fiona or Nina.
The content of this bulletin is provided for
the purposes of general interest and information. It contains only
brief summaries of aspects of the subject matter and does not
provide comprehensive statements of the law. It does not constitute
legal advice and does not provide a substitute for it.