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TODAY'S OTHER NEWS

Trading Standards: Why POA listings are unlawful

The National Trading Standards Estate and Letting Agency Team (NTSELAT) deemed yesterday that the use of POA or “price on application” on listings is unlawful.

NTSELAT was asked by industry to provide a view on the use of POA as part of the ongoing process to improve the disclosure of material information on property listings.  

It has now published an opinion, developed with barrister Lee Reynolds in December 2020  and more recently the Competition and Markets Authority (CMA) , that the phrase contravenes consumer protection legislation.  

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The conclusions from NTSELAT said: “Our view is that ‘POA’ or ‘price on application’ in relation to a property listing, whether on a property portal or an agent website or similar is likely to be misleading as it is withholding or in some cases masking the asking price from consumers. 

“Not displaying the asking price is likely to be a misleading omission in that the price is information which the average consumer needs in order to take an informed transactional decision – i.e. to make enquiries about the property, conduct further research, arrange a viewing etc. The Competition and Markets Authority has also confirmed that it considers that the absence of pricing information (i.e. the POA approach) is likely to mislead by omission.”
 

A failure to indicate the price of a property may also be a breach of para 7i of The Property Ombudsman code of practice for residential estate agents, Trading Standards said.

Its full opinion is below:

Background

The Consumer Protection from Unfair Trading Regulations 2008 (the CPRs) The Consumer Protection from Unfair Trading Regulations 2008 (legislation.gov.uk) control unfair practices used by traders when dealing with consumers, and create criminal offences for traders that breach them.

The Regulations prohibit unfair commercial practices and set out the criteria on the basis of which practices are to be classified as being unfair, including being misleading by action or omission. Commercial practices are misleading by omission if, taking into account the circumstances of the commercial practice and the medium used to communicate it, they omit, hide, disguise or delay material information so as to cause the average consumer to make a transactional decision that they would not otherwise have made.

Misleading omissions

Regulation 6 of the CPRs states (inter alia):

6.(1) A commercial practice is a misleading omission if, in its factual context -

(a) the commercial practice omits material information,

(b) the commercial practice hides material information,

(c) the commercial practice provides material information in a manner which is unclear, unintelligible, ambiguous, or untimely

and as a result it causes or is likely to cause the average consumer to take a transactional decision he would not have taken otherwise.

Definitions

‘material information’ means the information which the average consumer needs, according to the context, to take an informed transactional decision

‘transactional decision’ means any decision taken by a consumer, whether it is to act or to refrain from acting, concerning—

(a) whether, how and on what terms to purchase, make payment in whole or in part for, retain or dispose of a product; or

(b) whether, how and on what terms to exercise a contractual right in relation to a product.

Opinion

Our view is that ‘POA’ or ‘price on application’ in relation to a property listing, whether on a property portal or an agent website (or similar) is likely to be misleading as it is withholding (or in some cases masking) the asking price from consumers. Not displaying the asking price is likely to be

a misleading omission in that the price is information which the average consumer needs in order to take an informed transactional decision – i.e. to make enquiries about the property, conduct further research, arrange a viewing etc. The Competition and Markets Authority has also confirmed that it considers that the absence of pricing information (i.e. the POA approach) is likely to mislead by omission.

Reference is made to a barrister’s opinion received from Lee Reynolds (dated 1/12/20), in particular the following paragraphs:

25. It is my firm view that … all important features that may impact on the decision to contact an agent about a property should be disclosed in the initial advert.

27. Agents must put themselves in the position of potential purchasers and ask whether omitting the information may make a consumer make contact regarding the property when they may not have done so had the information been disclosed.

28. … the position is just as clear when considering the legal requirements of property portals. Once again they, like anyone in the industry, are fully aware of the obvious importance of this information, fully aware of the impact that a failure to disclose can have and should not be listing properties without this information.

29. … it is difficult to see a portal having a defence under Regulation 16 or 17 simply on the basis of being a portal. They may have a defence where the information is provided but is subsequently discovered to be factually incorrect but I cannot see how, when agents and portals are fully aware of the importance of this information, a failure to include the material information in the first place can be justified.

30. Furthermore I fail to see how any portal could rely on Regulation 18 once they are effectively “on notice” from NTSELAT of the implications of failing to make the information available. Quite frankly I am surprised they need to be “on notice” in the first place based on the obvious importance of this information. It must not be forgotten that for many, if not most, the purchase of a property will be the biggest financial decision of a consumer’s life – a failure to provide such basic and available information is simply unacceptable in my view and likely to constitute a criminal offence.

A failure to indicate the price of a property may also be a breach of para 7i of The Property Ombudsman code of practice for residential estate agents (all nations) Codes of Practice (tpos.co.uk).

Note: The National Trading Standards Estate & Letting Agency Team wishes to make it clear that when providing any advice or guidance:

Legislation may change over time and the opinion given is based on the information available at the time it was produced. It is not necessarily comprehensive and is subject to revision in the light of further information. Only the courts can interpret statutory legislation with any authority.

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    The nanny state strikes again. We are witnessing the devolution of the human species.

  • Samantha Sullivan

    I had a 400k property. During the Welsh lock down a London based company (full of themselves), not only stole my photos and watermarked them as their own, set up an open house when Wales was closed for viewings, he did the POA thing and the property came under the £300k price band for searches. So people went to the open house expecting it to be in their budget. Very misleading.

    Good for commercial though so it does have it's place somewhere.

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    So you put a property on at £500,000 STC, you have multiple offers and it sells for £550.000. Did you just mislead the other applicants? Selling property is not like retailing televisions. It is complex and subject to contract, which is why it is undertaken by deed and with the advice of solicitors and surveyors. NTS need to give consideration to this.

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    If the property is marked at £500,000 STC it has already had it's offer of £500,000 accepted and thus sold for £500,000 no?
    Unless you gazump your buyer, but nonetheless the next buyers will be aware of its listed value.

     
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    Pathetic waste of tax payers money as usual, 1st world issue again. "ooh we have nothing to investigate this week, lets look at POAs whilst "working from home" - meanwhile in Ukraine! sad state of the UK this is.

  • Richard Copus

    Well done James! Forget all the pedantic reasons on why POA is unlawful. It is simply a pain for house hunters. A few years ago when I was moving for the first time for yonks, I found nothing more frustrating than seeing POA advertised and having to waste time contacting the agent only to be told that the price was way above what I could afford or a bracket of figures that the owner was sort of hoping to achieve. Sometimes we agents need to put our consumer hat on.

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    Absolutely! Agents don't have a good commercial rep as it is, being evermore transparent to the consumer and putting that hat on once in a while could help turn that around.

     
  • Shaun Adams

    POA is stupid - if a POA prop on rightmove is between two others at £1M then guess what it's £1M.

    Why waste people's time contacting the agent about a price.

    Imagine if petrol was POA?

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