Countrywide is to appeal against being found guilty of breaching consumer legislation. The appeal is set for early February.
The landmark case was the first to be brought under the Consumer Protection from Unfair Regulations 2008, and was about an agent’s obligations of disclosure.
It was heard by Wrexham Magistrates Court in Wales, with the prosecution brought by the county’s trading standards.
The Countrywide business Beresford Adams was the subject of a complaint in 2011 about a house being offered for sale.
The complainant had put in an offer on the property which was accepted, but subsequent searches and surveys revealed the presence of a mineshaft close by. The complainant later learned that Beresford Adams had been aware of the presence of the mineshaft, having had their attention drawn to it by other potential purchasers who had pulled out of the deal when they discovered the old mine.
The court heard that the agents did nothing about this information, allowing the complainant to go ahead and incur the costs of searches and a survey.
Office of Fair Trading guidance says that under the Consumer Protection from Unfair Trading Regulations 2008 – one of two pieces of legislation replacing the Property Misdescription Act – agents must not leave out important information.
Even if agents are not aware of a particular drawback or material feature, but should have been and fail to disclose it, then the agent could be culpable.
The guidance warns that breaches could lead to criminal enforcement action, unlimited fines and up to two years in prison.
In the Beresford Adams case, Wrexham magistrates imposed a fine of £3,500 and ordered the firm to pay the council costs of £5,000 plus complainant compensation of £515, representing the cost of searches and surveys.
Wrexham Trading Standards said at the time of the magistrates’ decision that the case could have far-reaching implications for estate agents. Yesterday, a spokesman said: “Wrexham Council is complying with the directions set by Mold Crown Court with the appeal set for February 4, 2013.”
A spokesperson for Countrywide’s Beresford Adams said yesterday evening: “After careful consideration of the judgement, we decided to appeal the decision given by the court. At this time we are unable to comment on the details of the appeal, as it is subject to an ongoing judicial process.”
The appeal will be of vital importance to estate agents, particularly if it tests the principle of ‘caveat emptor’ against the newer consumer legislation.
The first link will take you to EAT’s report of the OFT guidance. The second link is how EAT covered the original court case. See also next two stories.
Comments
Mr Lloyd - does it matter what street the property is in? Clearly the town is built over mineworks.
If you are a local - don't claim you didn't know. Live with it - or move elsewhere.
'La di da' - looks like you have this story to yourself now.
Don't lose any sleep over it, though... ;o)
hi which street was this house in ? as ive just found out the same thing has happened to me in rhos with a property
I'll let you have the last word or else you'll never let me rest!!
Snooze and you lose...
I'm going back to bed.....
La di da:
Sleep all you want when you're dead.
As long as you have a pulse - get some homes sold! ;o)
It's not a case of the Gvt 'hand-holding' over this - it is THEIR OFFICERS who are going to be knocking on your door looking to prosecute - therefore in order to avoid this action you (Estate Agents) need surely to be given the goalposts, set in concrete, to shoot toward?
LAW should not be open to interpretation. Estate Agents should not be needing to cross their fingers that every instruction doesn't land them in the Dock.
With the PMA - you had PMs to work with. Describe a Leasehold property as Freehold and you shot yourself in the foot. That didn't even need to be questioned as to whether a "reasonable person" would find this misleading.
What have you got with the CPRs?
A whole lot of worms and a very small can, methinks...
Agreed and Its the reason I said 'This is exactly the type of case that should question our practice and remove any allowance for discretion'.
As an Industry we accept sales will fall through and properties will get withdrawn and fiscally plan for this yet we appear to want to cling to these types of sales. We should plan for disclosure and dis-instruction which would then negate any room for 'discretion'.
We're educated fellows that don't need to wait for the government to hold our hands, likewise we shouldn't be using them as an excuse.
I take a clear stance on the matter which you wholeheartedly agree with, maybe Countrywide should have too.
Now let me sleep man!!
'La di da'
As you will understand and appreciate, to be devoid of a sense of humour in the property world is unimaginable!
Good on you for your stance on disclosure. Whether it is a by-product of self-protection, of professionalism or of dedication to providing a fair service to all 'consumers' is irrelevant I suppose - but I get the feeling that you are one of those (...majorityof...) consciencious Agents who enjoys your shut-eye and therefore don't do anything that will cause you sleepless nights... am I right?
I would agree wholeheartedly with you in terms of disclosing what would be a material concern, affecting the current or future resaleability of a property - but of course subjectiveness (aka 'discression'...) gets in the way. In order for the seas to be clear enough for those that sail in them to avoid running aground, then our elected Government need to provide a clear, concise and READABLE map of those rocks and wrecks that litter the lanes.
Up to that point, when the rules are written in stone and not smoke, the wrecks are going to pile up and cost you all dearly, I fear.
And when it comes to mines in Wales - there's an AWFUL lot of disclaimers need to be added to details, don't you think? Same for Yorkshire... Northumberland... Durham... Nottinghamshire...
OI! You snoring again?
...typical! ;o)
Cheers PeeBee and good to see you take an joke! Right, lets get started..
The paragraph you highlighted was aimed the regulatory bodies, their proud declaration being that, to use one of their member agents will provide a higher standard of service and greater consumer protection. Given such an ethos your question would be better served if directed at them as my interpretation of 'consumer' is irrelevant.
The conflict of interest I speak of is a recognised one and one that required legislation to redress it. Our duties are defined but yet we all implement them at our discretion, hence my term fractured.
I find this matter to be a simple one and your next question self explanatory. When I'm presented with information or facts that have a direct and persistent impact on a property, I disclose.
I may lose a listing but I certainly won't lose any sleep worrying over the repercussions such as those being experienced by Countrywide.
Better to disclose or simply dis-instruct than to endure the ire and expense of the judicial system.
'La di da' - I'm glad I provided you with some much-needed sleep. Reading what you write when refreshed, you must be a right grumpy bu99er when you haven't had your dinnertime nap...
ANYWAY... you say "A clear conflict of interest that fly's in the face of all the guff our self regulating bodies proclaim they represent, consumer protection..."
So - from what you write you are actually an Agent. Tell me - who is YOUR 'consumer'? Vendor? Purchaser? Anyone who views your properties on a website?
ALL of the above? That seems to be what the CPRs would be aimed at - making you 'responsible' to ALL.
Please tell - how will YOU deal with the conflicts of interest that this would inevitably create?
Was that short enough for you?
Wardy - if you think i have missed the point please feel free to present your argument or even dispute mine. I would rather miss the point than be pointless.
So everyone has an opinion, I wish I could tell you what PeeBee's was but I dozed off during the 3rd paragraph, might want to get to the point quicker fella. And wardy 'king of the one liners' making his usual fleeting appearance, can't add substance if you don't say much geezer. (and before you say it, I'm not a troll)
Just another example of how fractured the Industry is with agents working at odds based on personal interpretations of the law. Sadly that seems to extend to ethics too.
This is exactly the type of case that should question our practice and remove any allowance for discretion. After all our role is inherently biased working for the vendor. A clear conflict of interest that fly's in the face of all the guff our self regulating bodies proclaim they represent, consumer protection...
Happy Chappy again, missing the point by the widest of margins.
Dear EA's and Peebee
IMHO the finding is clear and difficult to oppose and the Countrywide appeal will fail.
"The complainant later learned that Beresford Adams had been aware of the presence of the mineshaft, having had their attention drawn to it by other potential purchasers who had pulled out of the deal when they discovered the old mine." (please note the current vendors may have been unaware of it themselves asthe mineshaft was brought to the EA's attention by new potential buyers who pulled out.)
One of the reasons a vendor instructs you is because you are the experts and you assume the risk of ensuring compliance with all the appicable laws.
So to represent them in their best interests and to protect yourself you must market a property in accordance with the CPR's.
If this means disclosing information to the buyer that the vendor would rather you not disclose, you MUST do it , the law is very clear. If not you face the same consequences as Countywide.
Under such circumstances your only alternative course of action is to not take the instruction or terminate your contract . This will mean the vendor must either market the property themsleves therby assuming the risks or find a less professional agent who will break the law on their behalf.
Saying you are acting in the best interests of your client is not a defence for breaking the law....however unfair it may seem!
'Hmmmm' Sorry but I aim to pull your post apart at the seams:
"Without knowing the detail, this seems like a pretty open and shut case."
Without knowing the detail, how CAN it seem so? You are simply guessing...
"Knowing full well that 1) there is a mineshaft nearby, and 2) that its existence has already deterred several other prospective purchasers - but then "neglecting" to mention it to the next sucker who comes along - would look fairly dodgy to most people."
1. What is "nearby"? Please qualify - because so far no report of the case has done so. You DO realise that almost half of homes in the UK are built "nearby" mineworkings, don't you - and that in the great majority of cases those mineworkings are DIRECTLY BELOW the property... and possibly closer than the one in question?
2. You are misinterpreting the reported facts. The report states the Agents as "...having had their attention drawn to it by other potential purchasers who had pulled out of the deal when they discovered the old mine." That could be - and most likely IS, that ONE set of prospective purchasers withdrew, not as you suggest as being the case, several. Again, without full facts you are shooting blind. Luckily for you, the fish you are shhoting at are in a small barrel so you may just get lucky.
"As for caveat emptor, why should buying a second-hand house - the biggest investment by far that most of us ever make - afford the purchaser less protection than buying a second-hand car?"
The answer to THAT, Sir/Madam/Prefer-not-to-disclose, is that when buying a second-hand car you MIGHT take a handy mate with you; you MIGHT take the AA/RAC to do an inspection - or you might just as easily buy blind a la EBay, Gumtree etc. If you are buying a property, the VAST MAJORITY of buyers will employ a team of professionals to check that their intended purchase is not only structurally sound and worth the money they intend to pay for it- but also that Legally it can be bought and resold without problem.
Why is it not a LEGAL REQUIREMENT of the vendor's conveyancer to provide such damning information as to a property's history and hidden skeletons BEFORE survey and searches are paid for and initiated?
Why should the responsibility fall on the vendor's Agent - whose sole responsibility under the Estate Agents ACT 1979 is to the vendor to secure a buyer at the best price - to scare off potential buyers by highlighting potential pitfalls (no pun intended...) of properties that, lets face it, have already proven their saleability when the current vendor bought them - without guns held to their temples?
Good luck, Beresford Adams, in appealing the case. Unless there is something I am missing in MY interpretation of the 'stated facts' (albeit incredibly sketchy...), I would have to say you were simply doing the job you were employed to do within the letter of the Law - and that should be recognised by the Appeal Court.
Please feel free to take a potshot at me in that barrel of yours, 'Hmmmm'...
These new regulations not only put caviet emptor into question but also our obligations to represent the vendors best interest. It would appear the if we know ,or even supect or should have known, something untoward about a property then we should tell prospective purchasers.
The previous rule of "only tell if asked" would appear to no longer apply, however I still feel we have a legal and moral obligation to represent our vendor clients best interest whilst maintaining a. fair attitude towards buyers.
The question for trading standards and the courts is can vendors still demand our loyalty?
________________________________________
If the material facts relating to the sale cannot be determined without a test case for each one..... the courts are going to be very busy indeed......
Eddy Bear - 'Come on - tell me 1 agent that would disclose this information and I could name 10 that wouldn't'
Absolutely agree but there in lies the deep rooted problem in our Industry which has earned us our reputation. If previous purchasers had pulled out then they know there's an issue and they should disclose; but we play a game of numbers in the hope that next buyers survey will not reveal anything.
The practice Eddy Bear declares and what Countrywide appears to concur is wrong and there's no defence but as we constantly chase the next fee our selective ethics take over.
We rant about consumer protection then blind side them...
Come on - tell me 1 agent that would disclose this information and I could name 10 that wouldn't
The problem we have with mining in Cornwall, is the very old mines (circa 1700) were very poorly mapped, if at all. When a buyer, in this part of the country, orders a desk-top mining search, it can look completely different to the one the vendor had when they purchased. There is a definate difference in the results depending on which company the mining search is obtained from. In instances like this the mining companies generally recommend drilling to establish exact location of the feature. I probably wouldn't agree to disclose unless a drilling had taken place?
......having had their attention drawn to it by other potential purchasers who had pulled out of the deal when they discovered the old mine...... But was it 'important' in general terms or just to these prospective purchasers?
.....having had their attention drawn to it by other potential
purchasers who had pulled out of the deal when they discovered the old mine. What is 'near by' ?
......The landmark case...... .....the prosecution brought by the county’s trading standards...... A test case?
Seems a question of degree. Much more detail required before any meaningful comments can be made.
Hmmm - if the agent DOES disclose this, aren't they failing in their duty to their client - the seller - the person who's paying them?
Isn't the owner/seller likely to be incensed at the agent actively deterring prospective buyers by mentioning something that isn't even part of their property, merely 'close by' ...?
Without knowing the detail, this seems like a pretty open and shut case. Knowing full well that 1) there is a mineshaft nearby, and 2) that its existence has already deterred several other prospective purchasers - but then "neglecting" to mention it to the next sucker who comes along - would look fairly dodgy to most people. As for caveat emptor, why should buying a second-hand house - the biggest investment by far that most of us ever make - afford the purchaser less protection than buying a second-hand car?
First real challenge to the CPRs, hopefully it will clarify things.
The acid test should be what you would expect in a particular area ie what is reasonable. After all it's not as if it's difficult to research these days. If the property is in an area full of old coal mines, mine shafts are what you get but you wouldn't expect it in say Sussex.
If something isn’t uncommon in in a particular area, it will be reflected in the price of properties there and won’t be any more or less saleable than other properties. A key element should be whether the buyer was disadvantaged. Other buyers having withdrawn in the Countrywide case is unlikely to help them.
But does an agent in West London really have to warn every buyer (or tenant, remember it applies to lettings as well) that there is aircraft noise, or seagulls in Blackpool, lack of parking around Wembley when there’s a match or concert on or that buses stop at the bus stop outside?
It’s rather apt that Basil Fawlty should sum it up: ‘Well, may I ask what you expected to see out of a Torquay hotel bedroom window? Sydney Opera House, perhaps? The Hanging Gardens of Babylon? Herds of wildebeest sweeping majestically across the plain?”