Estate agents are being asked to do too much when it comes to material information rules but there appears to be little regulation to check compliance so far, a legal expert claims.
Tim Middleton, a partner at the law firm BDB Pitmans, has warned that the National Trading Standards Estate and Letting Agency Team (NTSELAT) material information rules raise problems for agents as they may require legal knowledge.
Writing exclusively for Estate Agent Today, Middleton said: “Given the amount of information that estate agents are now required to provide to would-be buyers, it is not surprising that several technology solutions have emerged to support them. But that is often not enough. The regulations require agents to do more than simply provide buyers with the required information – they are expected to verify whether the information provided to them by third parties is accurate or not.
“And it is here that problems can occur.”
He highlighted that legal documents such as restrictive covenants can be hard to interpret and while law firms such as BDB Pitmans offer support some estate agents, this can be costly and some may not want to pay if there is no guarantee of a sale.
Middleton suggests there is little proactive enforcement of the rules so far anyway, partly attributed to the lack of resources at Trading Standards.
He said: “It is more likely that enforcement will follow complaints from savvy buyers to the NTSELAT. And here, it is entirely feasible that it will look to make an example of an estate agency practice that ignores or does not meet the regulations. In short, the NTSELAT will look for a high-profile scalp to send a message of intent to the industry.”
Middleton said the aim of the rules is laudable but warned it is almost always the chain that slows the buying and selling process down, not the upfront provision of information.
He added: “So, whilst most estate agents are likely to ensure they comply with the regulations by one means or another, there is a risk that they ultimately become nothing more than another meaningless box to tick.”
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Then don't comply. The guidance isn't mandatory.
Material Information is legally mandatory. Google - national trading standards material information estate agents
This article is somewhat misleading. Here is a quote from an EAT article from April this year "This is guidance; it is not law and there is no change to the law. It is basically trading standards outlining what they believe is material information for property buyers. In fact, both the estate agents and letting agents guidance documents contain this sentence - The contents of this guidance does not constitute legal advice, merely the application of the law as interpreted by the National Trading Standards Estate and Lettings Agency Team; only a court of law can provide certainty."
It's important to note that estate agents are not legally required to provide material information to buyers. While trading standards may offer guidance, it's essential to recognise that this guidance is not the law. There is a valid concern that including inaccurate information in property brochures could lead to misdescription claims. In today's information-rich environment, buyers conduct thorough research and do not solely rely on an agent's property brochure. Therefore, estate agents must exercise caution and only provide information that they can guarantee is accurate.
From the National Trading Standards Estate and Lettings Agency website...
"Under current legislation, as set out in the Consumer Protection from Unfair Trading Regulations 2008, estate and letting agents have a legal obligation not to omit material information from property listings. But current practices around disclosure are not consistent across the industry."
"That’s why we’re [NTSELA] working with portals – and industry more widely – to ensure more material information is made available on property listings so that consumers can make informed decisions and agents can meet their legal requirements at the very beginning of the consumer journey. This will provide greater clarity and consistency across the industry, saving agents time and money on wasted enquires and legal disputes while protecting consumers from nasty surprises."
So if the governing body provide guidance on what they believe MI is, does that then mean estate agents need to comply with the CPRs and provide MI?
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