Agency Flashcards
What does the Estate Agency Act 1979 legislate?
7 key areas/principles
THICDOM:
1) Clarity in terms of engagement (Section 18)
2) Honesty and accuracy in all actions
3) Agreement and liability for costs
4) Openness regarding personal interests (section 21)
5) Absence of discrimination
6) Legal obligation to keep a client informed about offers
7) Keeping client’s money
When does the Estate Agency Act 1979 apply?
1) Disposal or acquisition of an interest
2) Freehold property or leasehold property with a capital value
3) Land
What is covered in section 18 of the Estate Agents Act 1979?
Section 18: Clarity in terms of engagement
- Specify the nature of the engagement (sole selling vs sole agency rights; sole, joint or multiple agentcy?)
- Itemisation of payments
- Advise client of any services provided to applicants (e.g. financial advice)
What is covered in section 21 of the Estate Agents Act 1979?
Section 21: Disclosure of personal interests
1) personal interests is a beneficial interest to yourself, associate, employer/employee or employer/employee’s associate
2) Should be disclosed in HoT. Don’t act if needed.
Penalties under the Estate Agents Act 1979?
Enforced by trading standards:
- negative licencing
- Prohibition order
- Warning order
- Costs to be paid
What are the Consumer Protection from Unfair Trading Regulations 2008 (CPRs)?
Business to consumer protection legislation.
- Protects the ‘average consumer’ i.e. a reasonably well informed person (can change depending on who you market to)
- Consumer is any interested party (viewers, bidders, client, tenants etc)
Under the CPRs, where is your duty of care?
To any interested party
When do the CPRs apply? How long for?
To any sale or letting, including marketing or property
During the entire sales/letting process
Can a disclaimer on an advert prevent CPRs?
No. Any omission can lead to a breach of the regulations.
What must you do if there is new information in a sale/letting?
Declare it to all parties involved at that stage and correct your marketing.
What are the key actions to take under the CPRs?
- Must declare everything you know about a property (good and bad)
- If there is something new that comes to light, must declare it
- Must not exert undue pressure on any party
- Full DD is required for all new instructions
- Information must be validated by the vendor
What are the penalties under the CPRs?
Policed by Trading Standards.
- Criminal offence
- 2 year prison sentance
- Unlimited fine and/or prohibition order
- Maximum compensation to complainant is £25,000
What do the CPRs cover?
“Unfair commercial practices are prohibited”
Misleading actions
Misleading omissions
Aggressive practices
A black list (eg limited time only/limited offer when it’s not, bait and switch)
What is an unfair practice under the CPRs?
Under the CPRs:
- Lower standard of diligence than expected
- Prevents an average customer making an informed decision
Average customer is a reasonably well informed person. Can be specific to a targeted group.
What are the BPRs?
Business Protection from Misleading Marketing Regulation 2008
