There have been concerns raised over new trading standards guidance for estate agents on having to reveal ‘significant defects’ about properties to potential buyers.
Yesterday we ran a story about the new National Trading Standards Estate Agency Team guidelines aiming to assist agents comply with the Consumer Protection from Unfair Trading Regulations 2008 (CPRs) and the Business Protection from Misleading Marketing Regulations 2008 (BPRs).
But now the Royal Institution of Chartered Surveyors says that while the guidance is straightforward to read and understand, it is concerned at the requirement to declare significant structural defects to buyers.
“The principle of declaring 'significant defects' that are 'material information' that may affect the 'transactional decision' of the 'average consumer' is fairly straight forward” it says.
But it believes less serious defects are a matter of judgement as to whether they are 'significant' and could be 'material information'.
“Since that judgement will be on a case-by-case basis specific to each property and its likely 'average consumer', it is simply impossible to set out definitive guidance on which defects are significant or material” explains RICS UK residential director Andrew Bulmer.
“NTSEAT have set out their guidance on this subject as clearly as anyone reasonably can and there is little we can add, beyond observing that case law will doubtless shine a light on where the boundary or boundaries may lie” he says.
Bulmer also says what precise information to give to buyers remains as unclear now as it did under the now-defunct guidelines from the former Office of Fair Trading.
“For example, a potential buyer making a decision to arrange a viewing is making a transactional decision. But it is neither practical nor reasonable to display a structural engineer’s report in a shop window or press advert” he says.
“The guidance does seek to address the principles of what information should be given and when, but agents will continue to face this challenge as previously. What is key is that buyers should not experience surprises on their journey to buying a property” explains Bulmer.
RICS says the best way to approach the new guidelines is to adopt five courses of action - Read the new guidance carefully, Review CPR/BPR procedures and the information signposting for buyers, Keep solid records, Train all staff well, and Maintain a watching brief for further news or cases that come to light.
If you didn’t catch it yesterday, the new guidance document is here.