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How to Ensure Your Estate Agency Business Complies with Consumer Protection Legislation

A range of consumer protection laws apply to estate agents, lettings agents and property managers. In this blog post we look at the laws that apply and the steps agents and managers can take to ensure compliance.What are the relevant consumer protection laws?

The Consumer Protection from Unfair Trading Regulations 2008 prohibit businesses (including estate agents, lettings agents and property managers) from engaging in unfair commercial practices in their dealings with consumers.

Other relevant legislation includes the Unfair Contract Terms Act 1977 and the Unfair Terms in Consumer Contracts Regulations 1999 (both of which outlaw unfair terms in contracts with consumers) and the Supply of Goods and Services Act 1982 (requiring services to be provided with reasonable care and skill).

Agents and managers who breach these laws can face:

•   Criminal penalties (fines or in serious cases imprisonment)
•   Unfair contract terms being unenforceable in the civil courts
•   Action by the Advertising Standards Authority
•   Disciplinary action by their professional body
•   A complaint being made to a redress scheme (Ombudsman)

What do I need to do?

Remember that the laws are relevant to every aspect of the agent’s service, including face-to-face interactions and the preparation of written materials. Therefore estate agents, lettings agents and property managers should take the following practical steps to ensure they are compliant with consumer protection legislation:

•    Make sure written information given to sellers, prospective buyers, landlords and prospective tenants is expressed clearly in plain English and is not capable of misleading them. This applies to contracts with sellers/landlords, particulars provided to buyers/tenants and tenancy agreements and related documentation.
•    Make sure that no relevant information is omitted from contracts, particulars or other documents.
•    Have draft particulars approved (in writing) by sellers and landlords. Draw their attention to the need for particulars to contain complete and accurate information.
•    When handling enquiries, ensure that the information given is clear, complete and accurate.
•    Ensure that sellers, buyers, landlords and tenants are given full details of any fees that will be payable. Make sure this information is provided in an accessible format. Ideally, quote the VAT-inclusive amount.
•    Make sure tenants are fully appraised of all fees, charges and other sums that are payable in addition to the rent (e.g. agent’s fees, cleaning costs, tenancy deposit).
•    Give material information at the appropriate time rather than waiting for the person to request it. For example, if you become aware of new information about a property, tell prospective buyers/tenants at the earliest opportunity.
•    If you spot a problem or a potential problem, e.g. you have concerns about the legal rights of access to a property you are marketing for sale, or there is a maintenance issue at a property you are managing, ensure it is investigated and that appropriate action is taken.
•    Do not act aggressively, e.g. when dealing with difficult tenants.
•    Be professional and act in accordance with the rules of your professional body.
•    Advise sellers, prospective buyers, landlords and prospective tenants of your complaints procedures, including details of any redress scheme to which you belong.

Further Information

The Competition and Markets Authority has published guidance for lettings agents on compliance with consumer protection legislation. See https://www.gov.uk/government/publications/consumer-protection-law-for-lettings-professionals.

Simply-Docs offers a range of professionally drafted template documents to help meet the needs of your estate agency business. Please click here for template terms and conditions, agency appointment forms and complaints handling documents.

By Iain Mackintosh

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