General P&S and L&L - Estate Agency Flashcards
(30 cards)
Are you aware of any RICS documents relating to estate agency?
Yes, I understand there is currently only one Professional Standard that has been published to date. This standard is Property Agency and Management Principles, 2024.
I understand that the RICS is due to substantially update the standards
What does the RICS Professional Standard: Property Agency and Management Principles 2024 state?
Brings together agency and management disciplines and contains advice in respect of residential and commercial real estate agency and management work, covering sales, lettings, and management.
The document is divided into two sections:
- Working with clients
- Managing businesses and staff.
What is the effective date for the RICS Professional Standard: Property Agency and Management Principles 2024?
1st January 2025
What advice is given to members on working with clients within the Professional Standard: Property Agency and Management 2024?
- SEEKING BUSINESS - Not to seek business by methods that are dishonest, deceitful, manipulative, or involve misrepresentation
- CLEAR REPRESENTATION - communicate accurately and transparently to correctly represent their service or product
- CLEAR FEES & TERMS - clearly communicate any fees and other charges in writing and provide clear terms of business
- ACCURATE ADVISE - Provide suitable, accurate, and unbiased advice to meet their clients’ aims and needs
- COMPETENT ON PRICE/RENT - Only provide advise on an appropriate price or rent if they have a thorough knowledge of the area.
What advice is given to member on managing business’ and staff within the Professional Standard: Property Agency Management 2024?
- How to manage businesses and staff effectively
- Take reasonable steps to ensure marketing materials are honest, professional, fair, and accurately reflect services provided.
- Ensure all advertisements meet the requirements of legislation.
- Maintain appropriate accounts and records of business activities
- Protect confidential information and only disclose for purposes provided or consented to, unless required by law.
- Have appropriate cybersecurity in place to protect their and their client’s data.
What is the RICS Professional Statement: UK Commercial Real Estate Agency 2016?
A RICS Professional Statement, which sets out mandatory standards and guidance for members involved in agency and management work. It sets out twelve core principles. The document is due to be updated shortly.
What are the 12 core principles under the UK Commercial Estate Agency 2016 Professional Statement?
- Professionalism - Act in an honest, fair, transparent, and professional manner.
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Skills & Due Diligence - Carry out work with due skill, care, and diligence. Ensure all staff employed have the necessary skills to carry out their tasks.
3.** Terms of Business** - Ensure that clients are provided with terms of business that are fair and clear, with the CHP. - Conflicts of Interest - Avoid conflicts but where do arise, deal with them openly and fairly
- No discrimination - Not to discriminate unfairly in any dealings
- Client Communication - All communication with clients are fair clear and timely and transparent.
- Marketing materials - All advertising and marketing material to be honest and truthful
- Client Money - All client money is held separately and covered by adequate insurance
- Insurance - Hold appropriate PII/errors or omissions insurance to ensure a customer does not suffer loss because of negligence.
- Client obligations - Make it clear to identify your client and ensure all parties are clear in your obligations to each party.
- Give realistic assessments to rent/price having regard to evidence and market judgement
- Viewings/Meetings/Inspections - all to be carried out in accordance with the clients wishes having regard to security and person safety.
What areas does the UK Commercial Estate Agency 2016 Professional Statement provide advise on?
- Acting ethically
- Securing instructions
- marketing the property
- Implementing the disposal
- Acquisition of property
Where does the Estate Agents Act 1979 apply?
Applies to the disposal or acquisition of an interest in land (Freehold, Leasehold with CV, and land as well as buildings).
What are the 7 Key Principles of the Estate Agents Act 1979?
- Clarity regarding terms (Section 18)
- Honesty and accuracy
- Agreement and liability for costs
- Openness regarding personal interests (Section 21)
- Absence of discrimination
- Legal obligation to tell the client about offers received
- Keep clients’ money separate
What does Section 18 of the Estate Agents Act 1979 relate to?
Clarifying terms of agency, including specifying all costs/fees in advance, including how they are calculated, in writing in the terms of business.
What are the penalties for breaking the Estate Agents Act 1979?
- negative licensing - the right to be an estate agent can be taken away and not granted
- The act allows for prohibition or warning order to be made against an agent:
- Prohibition order stops an agent practicing
- Warning order gives an agent written warning not to undertake
The action again - Usually only a minimal number are issued each year
- Can be against an individual or a practice and costs can also be
awarded.
What is the Estate Agents (Undesirable Practices) (No 2) Order 1991?
It is an Order made under the Estate Agents Act 1979, which means estate agents must inform their clients at the same time as they are informed about their terms of business as to any services to be offered to prospective purchasers unless they are offered free of charge.
What is Estate Agents (Provision of Information) Regulations 1991?
This is a regulation which relates to the information which should be supplied to a client. Specifically stating the service provided and remuneration details should be provided in writing.
What is a “cooling-off” period?
A period of up to 14 days is allowed for clients who change their minds and do not want to instruct the agent in accordance with current consumer protection regulations.
Which Act did the Consumer Protection Regulations replace?
The Property Misdescriptions Act 1991
Which parties are considered for Consumer Protection Regulations?
Business-to-Consumer work
Which regulations replaced the Property Misdescriptions Act 1991?
- Consumer Protection Regulations under the Unfair Trading Regulations 2008
- Misleading Marketing Regulations (Business Protection Regulations) 2008 in force under the Enterprise Act 2002
Which parties are covered under the Misleading Marketing Regulations?
Business-to-business work
What duty of care applies under the Consumer Protection Regulations? Who does this apply to?
Duty of care to give accurate and/or necessary information and not to make and misdescriptions in the material.
Applies to: Potential buyers, vendors, potential clients, viewers, buyers, and actual buyers (all consumers).
What does Consumer Protection Regulations define the ‘average consumer’ as?
A reasonably well-informed person.
What does the Consumer Protection Regulation seek to do?
Prohibit unfair business-to-consumer practices on all lettings and sales, as well as online agency. Unfair practices could include giving false or misleading information, hiding or failing to provide information, omission (leaving something out), and exerting undue pressure on consumers or failing to show professional diligence.
To combat this all agency processes/systems should be demonstrated with a due diligence audit trail.
Who are the Consumer Protection Regulations and the Business Protection Regulations policed by and what are the penalties for a breach?
The penalties are an unlimited fine and/or a prohibition order. Compensation may also need to be paid to the complainant up to £25,000.
This is policed by the Trading Standards Office in the local authority.
What key factors are mentioned within the Consumer Protection Regulations?
- Agents must declare everything known about a property - good and bad.
- Agents have a duty of care to clients and all interested parties
- Regulations apply to all sales and lettings
- Any information from the client should be verified, or if not available states as advised by the vendor (not good enough to say relied upon if extra steps should have been taken).
- Disclaimers do not act as evidence if this offence is committed.
