Calling all Estate and Lettings Agents…do you REALLY know your legal obligations?

Having advised many Estate and Lettings Agents on legal matters ranging from misdescription in particulars, sales commission disputes and claims to the Property Ombudsman, I am well aware of the legal issues which property professionals face day-to day. However, there remains some doubt in the sector as to how far an agents’ legal duties towards a vendor actually extends.

Below I examine some of the key areas, which, if followed, could save agents considerable time and money.

Explain to Clients’ what key terms mean

Agents must explain to vendors, in writing, what common terms such as “sole selling rights”, “sole agency”, and “ready, willing, and able purchaser” mean, particularly where such terms are repeated in the contract between the parties.

Ensure that any contract terms are fair

Sounds easy right? In practice not so.

The introduction of the Consumer Rights Act 2015 (CRA) replaced three major pieces of consumer legislation – the Sale of Goods Act, Unfair Terms in Consumer Contracts Regulations, and the Supply of Goods and Services Act. It was brought in to simplify, strengthen and modernise the law in this area. It also brought with it a test of fairness. Examples of where an Agents’ contractual terms have fallen foul of the CRA include:-
•terms that give an agent the right to terminate the contract at its discretion where the vendor is not given the same right;
•terms providing for a vendor to give its solicitor “irrevocable authority” to pay the Agents’ fees; and
•terms imposing disproportionately high charges for a vendor’s failure to comply with contractual obligations, such as late payment of fees.

Property Misdescription

Agents must comply with their legal obligations with respect to property misdescription, with a failure to do so leading to both civil and criminal liability. An Agent must be accurate, fair and not misleading in the information they give or do not give, with the legal test being what an average consumer would need to know, the guidance stating this would be the asking price, location, number and size of rooms and tenure (freehold or leasehold). At the outset you are not expected to have to research areas outside of your scope such as ones that are the roles of Surveyors or Conveyancers. But, if you do become aware of them, you must not ignore or suppress them. If material – disclose it.

Examples of failure to comply with the rules include:-
•advising that a particular asking price would be appropriate to gain a listing where you know that it is not an honest or fair appraisal and is done to get the business;
•giving false information about likely interest, or creating false viewers; and
•Limited availability or time pressures which are untrue.

Written by Joanne Holmes of Attwells.com

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