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Trading Standards Officer Provides Guidance On CPRs Compliance

1st December 2013

We were recently provided with some guidance given by a local Trading Standards officer in response to how specific scenarios would be viewed under Consumer Protection Regulations. Given the current concern amongst agents, we wanted to share the guidance to provide some further clarification. Please note that this is the interpretation of one Trading Standards Officer but very useful information nonetheless. Please find this guidance below:

Consumer Protection from Unfair Trading Regulations 2008 do affect Estate Agents and go beyond the now repealed Property Misdescriptions Act 1991. Under th

is previous legislation effectively an Agent didn’t need to mention anything; as long as they didn’t lie or mislead if they did mention something in property particulars etc.

The Consumer Protection from Unfair Trading Regulations 2008 now prohibits misleading actions and/or misleading omissions which cause or are likely to cause an average consumer to take a transactional decision he wouldn’t have taken otherwise.

Misleading actions, with regards to property sales, would include the giving of misleading information about the characteristics of a property, the nature of the sales process or the price. With regard to misleading omissions, an Agent is required to give material information a consumer would need to make an informed decision and therefore they cannot omit, hide or present in an unclear way, material information they would need.

Therefore an Agent needs to consider what information they are obliged to give and when it needs to be given, i.e. in the property particulars; when the consumer calls the agent to arrange a viewing; when the consumer is viewing the property etc.  The Agent will need to consider whether the information is needed in order to make an informed transactional decision.  He must also consider that the ‘transactional decision’ will not necessarily be the decision to purchase the property, but may be the decision to pay for the telephone call to arrange the viewing, or the decision to travel 450 miles from Scotland to come and view a property.

Unfortunately, there are no hard and fast rules regarding this and Agents will need to consider everything on a case by case basis.  Agents will need to decide whether consumers, had they been given the information, would have made a different transactional decision.  The offences for engaging in a business practice that are a misleading action or a misleading omission are strict liability offences, so it won’t matter about the Agent’s intent etc.  If the consumer has taken a transactional decision he would not otherwise have taken, or the average consumer would likely have taken a transactional decision they wouldn’t otherwise have taken, then the offence has been committed.

Of course there has to be a balance between marketing a property, making it seem attractive and the need to give as much information as possible to a consumer so they are not misled.  As such there would be certain information that doesn’t necessarily need to be declared on property details, but should be declared before the consumer decides to buy the property (or incur the expense of travel, employing solicitors, survey costs etc.)

Regarding your specific scenarios;

• Down valued property due to surveyors report – this should be disclosed to a consumer

• Property backs on to a railway line – this should be disclosed to a consumer

• Adverse survey – this should be disclosed to a consumer

• Flood risk etc. – if the results show there is a risk then this should be disclosed to a consumer

• Subsidence – this would depend on what information you had, location of property compared to affected properties etc.

• Ex-Local Authority – if a property is an ex-local authority property then this should be disclosed to a consumer

• Vendor keeps withdrawing property – personally I would refuse to keep marketing their property but if you did continue marketing, then this is probably information that should be disclosed to a consumer

Unfortunately, I cannot tell you when this information needs to be given to a consumer, but as previously stated, you would need to consider if not telling them in property particulars, or not telling them when they call to arrange a viewing, or not telling them when they do view, would cause them to make a transactional decision they wouldn’t otherwise have taken.

The client and experts view...

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