Estate Agency (Purchase and sale; Leasing/letting) Flashcards Preview

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Flashcards in Estate Agency (Purchase and sale; Leasing/letting) Deck (60)
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1

What professional statement did the RICS release for global agency practices?

RICS Global Real Estate Agency and Brokerage, 2016

2

What RICS professional statement sets out mandatory standards for those involved in agency and real estate management work?

RICS UK Commercial Estate Agency, 2016

3

What does the RICS UK Commercial Estate Agency, 2016 contain?

12 core principles which agents must observe

4

Give an example of some of the principles contained within RICS UK Commercial Estate Agency, 2016.

• Act in an honest, fair, transparent and professional manner
• Ensure clients are provided with terms of business that are fair and clear, with details of the firm's complaints handling procedure
• All advertising and marketing materials must be honest and truthful
• Give realistic assessments of selling prices / rents / financial costs having regard to market evidence and using best professional judgement

5

What is the key estate agency legislation?

Estate Agents Act 1979

6

When does the Estate Agents Act 1979 apply?

• Disposal or acquisition of an interest in land
• Freehold property
• Leasehold property with a capital value
• Land as well as buildings

7

What are the SEVEN key points which the Estate Agents Act 1979 promotes?

1. Clarity as to the terms of the agency (Section 18)
2. Honesty and accuracy
3. Agreement and liability for costs
4. Openness regarding personal interest (Section 21)
5. Absence of discrimination
6. Legal obligation to tell client about offers received
7. Keep clients' money separate

8

What are the different types of agency and selling rights that can be agreed?

• Selling rights: fee will be owed regardless of whether the agent introduced the buyer
• Agency rights: fee will only be owed if the agent introduced the buyer

• Sole: exclusive rights appointed to one agent
• Joint: two agents are appointed to act together and the fee is split on a pre-agreed basis
• Multiple: more than one agent is appointed but only the agent who finds the buyer is paid a fee

9

What must you do according to Section 18 of the Estate Agents Act 1979?

• Specify all costs/fees in advance, in writing in the terms of business
• Itemise all payments - no global budget is allowed

10

What must you do according to Section 21 of the Estate Agents Act 1979?

• Disclose any personal interests - a "connected person" is someone who benefit financially from the transaction such as a relation or business associate
• Any personal interest should be declared on the terms of engagement as a minimum and if appropriate not continue to act

11

What must you do according to the Estate Agents Act 1979 when you receive offers?

• Must report all offers received to the client, promptly and in writing
• Not able to misrepresent interest/offers - you can only tell the truth regarding offers received

12

Who polices the Estate Agents Act 1979?

Trading Standards Office

13

What are the penalties for non-compliance with the Estate Agents Act 1979?

• Negative licensing - the right to be an estate agent can be taken away and not granted
• Prohibition order to prevent the agent practicing
• Warning order gives an agent a written warning not to undertake the action again

14

What does the Estate Agents (Undesirable Practices) (No 2) Order 1991 dictate?

Estate agents must inform their clients at the time same time as they are informed about their terms of business, as to any service to be offered to prospective purchasers unless offered free of charge

15

What do the Estate Agents (Provision of Information) Regulations 1991 dictate?

Related to the information that should be provided in writing to the client:
• Service to be provided
• Renumeration

16

What is the 'cooling off' period?

Period of up to 14 days is allowed for clients to change their mind and not instruct an agent in accordance with the Consumer Rights Act 2015

17

What will the newly proposed Registration of Overseas Entities Bill require? What is the aim of the Bill?

• Will require overseas companies to provide details of their ultimate owners, which will be placed on a public register
• Prevent money laundering and make the UK a world leader on corporate transparency

18

What are Unexplained Wealth Orders (UWOs)?

Can be applied to the owner of any property asset over £50,000 where the Government has reasonable grounds for suspecting criminal funds have been used

19

Who do the Consumer Protection from Unfair Trading Regulations (CPRs) 2008 relate to?

Business to Consumer activities

20

Who do the Business Protection from Unfair Trading Regulations (BPRs) 2008 relate to?

Business to Business activities

21

Who is owed a duty of care under the CPRs / BPRs?

Potential buyers and vendors, potential clients, viewers and actual buyers

22

What agency practices do the CPRs / BPRs? relate to?

• Lettings
• Sales
• Online agency

23

What must agents do to ensure compliance with the CPRs / BPRs?

• Declare everything known about a property - good and bad
• Not exert undue pressure on potential buyers
• Undertake full due diligence for all new instructions
• Pass any information discovered during the agency process onto all interested parties

24

Who polices the CPRs / BPRs?

Trading Standards Office

25

What is the penalty for breaching the CPRs / BPRs?

• Unlimited fine and/or a prohibition order
• Compensation paid to the complainant of up to £25,000

26

Can you disclaim outside of the CPRs / BPRs?

No

27

What does the Misrepresentation Act 1967 relate to?

Misrepresentation or a false statement of fact made by a party during pre-contractural enquiries, which has the effect of inducing the party to purchase

28

What is the penalty for breaching the Misrepresentation Act 1967?

Vendor and/or agent can be sued for damages and/or the contract rescinded

29

How can a vendor / agent protect themselves from the Misrepresentation Act 1967?

• Check that the advice, information or opinion provided is reliable
• Exclusion / disclaimer clauses if fair and reasonable

30

What does your firm's disclaimer say regarding the Misrepresentation Act 1967?

• Particulars are not to be considered a formal offer
• Should not be relied upon as statements or representations of fact
• Whilst every care is taken in their preparation no liability can be accepted for their accuracy
• Purchasers must satisfy themselves by personal inspection or otherwise as to the correctness of the particulars