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New Guidance on Fees from Trading Standards

Thursday 28 February 2019

National Trading Standards Estate Agency Team (NTSEAT) has, today, issued new guidance on the transparency of fees involving property sales. The guidance specifically addresses the application of fees advice under the Consumer Protection from Unfair Trading Regulations and the transparency of referral fees.

NAEA Propertymark has made an evidence-based argument that Government should not ban referral fees as this would increase costs for consumers and be detrimental to estate agency businesses at an important time for the housing market with smaller agents, in particular, affected the most.

The guidance

The guidance states an estate agent should disclose in writing, at the earliest opportunity, in plain terms
(a) The price of its services, including any “compulsory” extras; and
(b) Where a referral arrangement exists, that it exists, and with whom; and
(c) Where a transaction-specific referral fee is to be paid, its amount; and
(d) Where a referral retainer exists, an estimate of the annual value of that retainer to the estate agent or its value per transaction; and
(e) Where the referral is rewarded other than by payment, an assessment of the annual value of the reward or the value of the reward per transaction.

View the guidance

The Guidance outlines The Estate Agents Act 1979, the CPRs, a full definitions of referral fees, as well as helpful information regarding circumstances when a referral fee arises and a disclosure form to use.

The guidance will be reviewed in 12 months' time with a view to understanding whether transparency is effective or whether further steps need to be taken.

Calls from NAEA Propertymark

NAEA Propertymark has long called for guidance which is easy for both agents and consumers to understand and comply with. It is essential for those buying and selling, that referral fees are fully disclosed in order to ensure that any fee and commission the agent will earn is quantified.

Mark Hayward, NAEA Propertymark Chief Executive comments: “We are very pleased that Government have refrained from a complete ban of referral fees. It is vital that agents now absorb the guidance completely and take steps to ensure that they are complying."

"For property transactions, the most important thing is to ensure that the process is totally transparent, the wording used is clear, the information is upfront, and the consumer understands that they have a choice over the financial and legal services and other referred services they wish to use. Information must be explained clearly in the sales particulars and terms of business, when the sale is arranged and outlined on the agent’s website."

James Munro from the National Trading Standards Estate Agency Team said: “It is important for customers to be aware of any referral fees that an estate agent is receiving for recommending a service such as conveyancing, legal services or other connected service, so that they can make an informed decision about whether to take up the offer or shop around for a better deal. I would like to thank the professional bodies and redress schemes for their support in developing this guidance and would urge estate agents to comply with the guidance as soon as possible."

“Agents who need further advice should contact their professional body or trade association. Members of the public should raise any concerns about referral fees not being disclosed to Citizen’s Advice on 03454 04 05 06.” 

Helpful information

The guidance specifically addresses the issue of transparency of fees, including referral fees within the estate agency sector and should be regarded as replacing any earlier guidance.

Failure to disclose referral arrangements may render an estate agent liable for criminal prosecution under the CRPs and/or action by NTSEAT for warning or prohibition under the Act.

The guidance supplements previous generic advice concerning the application of the Consumer Protection from unfair Trading Regulations 2008 ('the CPRs') issued by NTSEAT.

NAEA Propertymark articles and consultations

Trading standards advice to be issues on referral fees - January 2018
Could referral fees come under threat? - June 2018
Improving the home buying and selling process - December 2017
Review into the house buying and selling process - October 2017 


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