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Should Non-Disclosure Agreements be banned in the property industry?

The controversy over the use of Non-Disclosure Agreements in the world of property resurfaced over the weekend in a BBC programme.

A senior MP told Radio 4’s Money Box programme that house builders responsible for conducting repair work on new-builds should be more transparent, with less or no use of NDAs to limit adverse publicity.

Clive Betts, who is chairman of the All-Party Parliamentary Committee on Housing, told the programme that some home owners say they have to sign NDAs as a condition of repairs being done.

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He describes the practice as “appalling.” 

The programme spoke with many industry figures who said the practice was used regularly but the Home Builders Federation claimed NDAs were "not widely used" by developers.

The issue comes after forms of NDAs are believed - but not confirmed - to have been used by Propertymark around the departure of senior figures; many senior managers, including chief executive Tim Balcon, have left the organisation with no explanation being given to members, and with journalists’ requests for information being dismissed.

It is hard to establish an accurate picture of the use of NDAs in Propertymark or other sectors of the property industry, because those who sign them cannot speak out without possible legal action against them.

On Radio 4 Clive Betts said housebuilders should be obliged to inform home owners when systematic defects were identified that might affect their property, which he said would be normal practice in other areas.

"If this kind of thing happens in the car industry, for example, car companies have to tell their customers, issue a recall and get the problem fixed. I don't see why it should be any different when it comes to buying houses. 

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    Sadly this type of behaviour is typical.

    I have acted for large landowners over the decades in dealing with national developers and some of the behaviour I have witnessed is shameful.

    Developers must clean up their act since some of them simply cant be trusted.

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    And all agents are squeaky clean!

     
  • Algarve  Investor

    Absolutely they should. If you want a transparent, trustworthy industry, NDAs are not conducive to that. I'm sure there are times when they are necessary, but as we've seen in recent years with many high-profile scandals, they are often used to muzzle people and protect the powerful and privileged.

    It baffles me how Propertymark thinks silence is the best answer here; while that happens the brand just continues to be tarnished. When five senior figures leave in a matter of weeks, something must be seriously wrong or rotten with that organisation.

    It's also inexcusable that developers are using it to get out of being honest with buyers and investors. In part, at least, this must have caused issues with the leasehold and cladding scandals. It is a disgrace and needs to be changed.

    NDAs are effectively a form of bribery, preventing people from ever speaking out by saying they'll be sued if they do, and lose their payout. Most people are going to want to take the money and keep their counsel in that case.

    The world of NDAs is murky and should be one the industry is doing everything it can to avoid, rather than encourage.

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    The public could not care less about propertymark.

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    • N W
    • 15 March 2021 13:20 PM

    Have been a member since I was 18 (now 53) and in truth (sadly) I couldn't now agree more - it lost its way and has become irrelevant for the industry and the consumer. It needs to be relevant quickly or pack up and go home in my view.

     
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