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Case Study: Agent should have known about local development in CPR case

13th April 2017

The Property Ombudsman (TPO) instructed agents to pay over £800,000 in 2015 to resolve complaints made in property disputes. The most common cited include communication failures, advertising errors, commission fees, conflicts of interest and agency agreements.

In the rulings we have seen the Consumer Protection Regulations (CPRs) increasingly quoted with the issue of misleading omissions and failure to disclose material information prominent.

In one example of a failure to disclose material information a purchaser had bought a property with “field views” only to find once the purchase had completed that there was a 16 acre substation set to be built obstructing the views. The agent claimed to be unaware of the development, however further investigation revealed

  • the issue had caused local uproar and had been debated extensively over the previous two years, including in local press
  • the agent had recently sold another property in the vicinity
  • the agent had sold a house belonging to the leader of the group opposed to the development

In a decision that may have repercussions TPO concluded that the agent was, or critically should have been, aware of the development and therefore was in breach of the CPRs in failing to disclose the information. The decision resulted in an award of £1000.

Any notion of an expectation to know what is happening locally is dangerous from the agent’s point of view; local knowledge is one thing but an intimate knowledge of local planning would seem to be grossly unfair. In previous judgements TPO has acknowledged that there is no expectation on agents to interpret or undertake investigations requiring legal training.

The solution is to err on the side of caution. As with client verification, the key is to ensure to document and evidence activity. Evidence that the question has been asked of your vendor; remember the liability for providing this information falls on the vendor as much as it does on the agent. Failure to provide such information would constitute a misleading omission under CPRs.

Landmark help you tick the right boxes with Compliance in a Box ensuring you ask the right questions and ascertain material information up front. Compliance in a Box also helps agents undertake and evidence Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD) for money laundering compliance. No contracts, tie ins or ongoing fees, simple pay as you go compliance; register today to try Compliance in a Box in your agency.


Compliance in a Box from Landmark is the industry recognised AML and CPR compliance solution for Estate and Lettings Agents developed with industry stakeholders including the NAEA and adopted by Relocation Agent Network, The Guild of Property Professionals and Fine & Country. For more information contact Samantha Peacock (sam.peacock@landmark.co.uk) on 01524 220013 or sign up below.

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