Recently conducted research has concluded estate agents continue to fail to provide material and up front information for would-be home buyers, falling foul of consumer protection regulations.
The Consumer Protection from Unfair Trading Regulations 2008 superseded the Property Misdescriptions Act 1991 in 2013, effectively requiring estate agents to provide ‘material information’ for the benefit of the ‘average consumer’ to enable them to make an informed transactional decision.
In the years since there has been much conjecture over what constitutes material information until the release of guidance from the National Trading Standards Estate and Letting Agency Team (NTSELAT). Published in three separate parts (A, B and C) the guidance is designed to provide clarity around key information sellers and estate agents need to provide in a property listing, and was developed by NTSELAT alongside industry membership bodies and property portals including Rightmove, Zoopla, OnTheMarket and Property Pal.
Part A was includes council tax band or rate, property price or rent and tenure information (for sales). Part B is information that should be covered for all properties – such as the type of property, the building materials used, the number of rooms and information about utilities and parking; and Part C is information that only needs to be established if the property is affected by the issue – such as flood risk or restrictive covenants.
Speaking at the Society of Licensed Conveyancers (SLC) conference last week, Rightmove’s General Counsel David Cox acknowledged that while the portal now complied with the requirements from the point of view of having all the information fields available, work was ongoing to collect this information from the various customer relationship management systems used by estate agents to populate the listings. He said around 64% of Rightmove listings now had some material information presented to consumers but acknowledged it varied in quality and detail. Around 90% now have the tenure listed; 3/4 have council tax information; meanwhile only around half (53%) of leasehold listings present service charge information.
Now research on two specific areas of listings has shown failings to provide key material information for consumers. Analysis of property listings by Moverly has revealed over 20,000 properties do not provide information relating to tenure, included in Part A of the NTSELAT guidance; some 4% of an estimated 523,000 current listings.
Where the Part B requirement relating to parking information was analysed, this rose to 25% of listings being non-compliant.
“This research gives a flavour of how many properties are still being listed without proper compliance with Trading Standards material information guidelines. The level of non-compliance we’re seeing from these two categories alone suggests that too many agents still aren’t taking material information as seriously as perhaps they should.”
“While almost all listings are being provided with important information such as price and physical characteristics, it’s concerning to know that thousands of buyers – in some cases hundreds of thousands – are still not being given the level of detailed information they require to make an informed decision in a timely manner.”
said Gemma Young, Moverly CEO. Young also flagged concerns with non-compliance around Part C requirements; regarded as the most complicated element of the guidance to evidence compliance with; and an area James Munro, Senior Manager of NTSELAT told this publication was ‘an opportunity for a change in the way conveyancers offer their services’ to create a service for home movers and estate agents to help them comply with the detail of the new guidance.
Speaking on the Today’s Conveyancer Podcast around the time of launching the guidance in full, Munro said
“It is not the agent’s job to interpret information, they simply need to establish material information. This is where a conveyancer might offer a limited service for home movers and estate agents who need support with complying with the guidance to go through these issues, interpret the issues properly, and come up with a pragmatic and informative way to disclose information that may be a little bit complex or details that the agent would not be in a professional position to display in that form.
Sometimes covenants (for example) can be quite straight forward, and others complicated. The message for conveyancers is where those flags in part C exist, estate agents should be advising vendors to instruct legal expertise.”
The NTSELAT Guidance also recommends the instruction of a legal professional at the point of listing.
“The figures laid out here don’t even delve into Part C of material information which concerns major issues that can impact the desirability of certain homes, including flood and erosion risk.
Concludes Young
“And while these issues don’t concern all homes, given the seriousness of them, Part C is, to certain buyers, perhaps the most important aspect of all material information. Compliance data in this area is hard to come by for now, but if we’re seeing such widespread non-compliance with Parts A and B, we fear Part C is being neglected even more, especially given that it’s the most newly introduced, and most contentious, part of the guidelines.”
“It’s fair to say that everyone involved with property transactions wants to see sales progress with the maximum possible efficiency, but until we start seeing a stronger buy-in to material information provision, too many easy wins are being passed up.”
