Agents Beware: Mandatory disclosure of referral fees still a possibility

It is possible that agents and their business partners in the conveyancing, mortgage and survey industries could be obliged to have referral fees disclosed by law.

Currently the agency industry is nearing the end of a 12 month trial period where agents have been advised - but not forced - to release details of referral fees to sellers and buyers.

This follows guidance released last February by the National Trading Standards Estate and Lettings Agent Team, after consultation with the NAEA, The Property Ombudsman, the Property Redress Scheme, the Guild of Property Professionals and the Royal Institution of Chartered Surveyors.

Next month, at the end of the 12 month trial, NTSELAT will assess the success or otherwise of the guidance.

“The report will go to ministers to decide whether this particular aspect of the market will be regulated or not” according to James Munro, head of the NTSELAT; he made his remarks in an address to the Council of Licensed Conveyancers. 

It is not known whether the rumoured Cabinet reshuffle next month will affect the timing of the political decision on how to address referral fees. 

Yesterday’s CLC conference heard that the government was minded to score some ‘easy wins’ by increasing regulation of estate and letting agents.

Lord Richard Best, who chairs the Regulation of Property Agents Working Group - which has recommended qualification exams for all agents - says greater regulation in principle is on the cards.

“The government - many governments - have realised that regulation doesn’t cost much and is popular with the public. There’s a chance to change the world a little bit and it doesn’t cost a lot” he told delegates.

This is because there’s a growing mood of accountability and transparency, with the consumer being king. “We’re no longer so deferential in society. The belief is that if something is regulated, the public won’t get ripped off” he continued.

As we reported here yesterday, Lord Best also confirmed that the qualifications for estate and letting agents - likely to be in force in around two years - would have no exceptions, even for seasoned agents who believed their experience more than compensated for not sitting examinations and securing qualifications.