Wednesday, September 19, 2012
The OFT has today published guidance to help estate agents and
others involved in property sales understand their responsibilities
under consumer and business protection regulations.
It is aimed at all property sales businesses, from estate agents
and property developers to intermediate websites that facilitate
contact between buyers and sellers.
The guidance identifies examples of trading practices that could
breach the regulations and includes practical steps that property
sales businesses can take to comply with the law, for example:
- Ensuring that any information provided, whether in writing, in
pictures or given verbally, is accurate when advertising for new
business or when marketing property. Breaches of the regulations
might include falsely claiming to be a member of a professional
body, misdescribing a property for sale or making unfair
comparisons with competitors.
- Not leaving out important information that consumers need to
make informed decisions. For example, throughout the buying and
selling process, businesses must provide the necessary information
to enable informed choices to be made on viewing a property, making
an offer or instructing conveyancers or surveyors.
- Not putting undue pressure on consumers to act quickly, for
example to put in an offer, raise their price, skip the survey or
- Having an effective customer complaints procedure that is
understood and followed by all staff who come into contact with the
The guidance specifically covers two pieces of existing
legislation: Consumer Protection from Unfair Trading Regulations
2008 (CPRs) and the Business Protection from Misleading Marketing
Regulations 2008 (BPRs).
Non-compliance with the CPRs and BPRs may lead to enforcement
action under the Enterprise Act 2002. This could see a trader
give undertakings, or be subject to civil court proceedings, to
stop breaching the regulations. It may also lead to criminal
enforcement action, an unlimited fine and up to two years'
imprisonment for a conviction in the Crown Court (or Sheriff Court
The guidance will assist traders and others (including enforcers
and consumer advisers), especially in light of the Department for
Business Innovation and Skill's announcement today that the
government intends to repeal the Property Misdescriptions Act 1991,
which has largely been superseded by the CPRs and BPRs.
Cavendish Elithorn, Senior Director of the OFT's Goods and
Consumer Group, said:
'Buying and selling a property is usually one of the biggest
purchases we make and can also be one of the most stressful. Unfair
business practices can cause substantial losses or frustration to
buyers and sellers either when transactions collapse or afterwards
when the truth is uncovered.
'In response to feedback, this guidance has been developed with
help from the property sales industry and Trading Standards
Services, to provide clear and comprehensive, but practical,
property sales guidance overview or download the full guidance on property sales (pdf 657kb).
Consumers concerned about the practices of an estate agent or
other property sales business can contact Citizens Advice's
consumer helpline on 0845 040506 or visit www.advice.org.uk. Alternatively, complaints
which consumers have not been able to resolve with the estate agent
can be taken to an OFT-approved redress scheme. All estate agents
must be registered with either the Property Ombudsman (visit www.tpos.co.uk or call 01722
333306) or Ombudsman Services: Property (visit www.ombudsman-services.org/property or call
- The Consumer Protection from Unfair Trading Regulations 2008
(CPRs) specifically prohibit traders in all sectors from using
unfair commercial practices in their dealings with (non-business)
consumers. The CPRs therefore prohibit property sales businesses
from engaging in commercial practices that are unfair to sellers,
buyers, potential sellers or potential buyers of residential
- The Business Protection from Misleading Marketing Regulations
2008 (BPRs) specifically prohibit traders in all sectors from using
misleading practices in their business-to-business advertisements.
The BPRs therefore prohibit property sales businesses from using
misleading marketing when they advertise services to potential
business clients or market commercial property for sale. This
includes unfair comparative advertising.
- Currently, the Property Misdescriptions Act (PMA) 1991 is often
used to address problems arising in this sector although the
Department for Business Innovation and Skills (BIS) considers it
has largely been superseded by the CPRs and BPRs. BIS consulted on
the PMA and has today announced the government's intention to
repeal the Act. Further information is available from www.bis.gov.uk/Consultations/repeal-property-misdescriptions-act-1991.
- The guidance was developed following the OFT's Home Buying and
Selling market study, which found that many estate agents said the
industry needed more guidance on the law.
- See the Home
Buying and Selling study 2010.
- The OFT, Local Authority Trading Standards Services and the
Department of Enterprise, Trade and Investment in Northern Ireland
have a duty to enforce these regulations