Agents have been warned that purchasers could prove to be extremely litigious following the repeal of the Property Misdescriptions Act and its replacement by the Consumer Protection from Unfair Trading Regulations.
EAT warned earlier this month that lawyers could have a field day, because CPR mean that agents – both letting and sales – have a duty to disclose information about a property:
https://www.estateagenttoday.co.uk/oldeat_news_features/Lawyers-could-have-field-day-over-agents-duties-to-disclose-property-information
Unfortunately, as our story pointed out, there is no universal agreement as to exactly what should be disclosed and when, meaning that what an agent does disclose is largely a matter of personal judgement.
With criminal penalties including large fines and imprisonment, there is also concern that property sellers and landlords are jointly liable with agents.
An insurance firm, Custodian Insurance, has now come up with a new Professional Indemnity product designed specifically to cover agents against breaches of CPR.
The PI product has already been made available to Let Alliance’s letting agents, and is now available to all property agents across the UK.
Zahid Naqvi, managing director of Custodian Insurance, said: “Rightly or wrongly, the UK is very much a litigious society, with consumers only too aware of their right to redress or financial compensation. Property agents would be wise to scrutinise their existing policies.
“The balance of power has ultimately shifted to buyers: it’s no longer a case of ‘buyer beware’ but ‘agent aware’.
“Professional Indemnity insurance does not only pay out in the event of a full claim but it also covers property agents for damages and legal defence costs should a client make a claim against them – whether accurate or completely unfounded.
The policy is underwritten by Axa Insurance UK Plc.
www.custodianinsurance.co.uk/products/insurance-for-estate-agents
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Comments
I had the joys of sitting in consultations and after the joys of reading the CPR document. Its a long haul 66 page document and if agents are upfront and honest its not a bad bit of legislation.
Its not so much a case of agents beware, as agents need to make potential buyers aware. Its simply about relaying information that could influence Joe Viewers opinion on whether they buy or not.
In many ways better as it saves dragging along with time wasters who find bits out later.
Whats missing is many other bits that the CPR document does, such as keeping a few big players out such as supermarkets offering 101 other services that agents could monetorise on. Although the likes of TESCO etc can now come in and provide a FSBO board, they can't offer ancilliary services otherwise they come under the same statute as agents.
I guess after the close CPR reading, next an agent needs to read insurance companies T&C's as to what, where and when they do and don't cover.
The CPR document is actually a good bit of legislation which also clearly shows the words ''sub agent'' meaning that portal reps can't say sub agency isn't allowed WHEN IT IS.