From the beginning of April, long-awaited rules from the National Trading Standards Estate and Letting Agency Team (NTSELAT) came into effect. Under the new rules, estate agents are required to list material information within property listings and now agents across the country are looking to revise and refine their processes to ensure all required information is provided on property details.
Rolled out in three phases, the first will require key information including the council tax band or rate, as well as the property price and tenure information to be included for all property listings under the new rules. The following two phases are to be introduced later and will require agents to make more material information available to consumers.
While agents still have the option to manually source and publish essential material information and keep up to date with new rules over time, many branches are questioning if they have the time or resources to accommodate this increased workload. As a result, agents are considering where they may need to invest in appropriate PropTech solutions, while some explore how they may need to work collaboratively with legal partners to stay compliant with new rules and avoid penalties.
Nat Daniels, chief executive pfficer of Estate Agent Today, spoke with Ben Ridgway, managing director of iamproperty, to discuss his perspective on how the changes will impact estate agents and their options for managing the change.
With the new material information rules coming in, what do you see them meaning in practice for agents?
It's an interesting one, as the rules have always been there in some form. Consumer protection regulations state that consumers need to be aware of anything that might materially affect their decision, but these regulations don’t get much focus from Trading Standards. So, I think in many ways the new rules are welcome. They will be introduced in three parts, A, B and C, with Part A due to come into effect in May.
In terms of a practical impact for agencies, I doubt much will change with the introduction of Part A for agencies as it is all easy enough to manage. They must ensure that they disclose the tenure, the council tax band and should already be doing that now. But when parts B and C come in, it gets more interesting because agents are going to have to start to disclose any restrictive covenants and things on the title that might be difficult to discuss.
For agents, it does mean they have a choice of either doing that themselves by downloading those titles and taking advice, or they can partner with expert support and allow technology to do the heavy lifting for them. That’s why we created movebutler, to make Estate Agents lives easier.
What are the penalties for not getting it right for an agent?
I don’t think the penalties are getting it quite right. Trading Standards can close an agency down, but are they going to do that? No, I don't think they are. It will be interesting to see the level of enforcement that Trading Standards takes, because that will be done on a local scale, and it will be a bit of a soft run into putting it all into practice. I imagine there will be some visits to the branch, and that agents will be given time to improve their processes.
For me, it goes hand in hand with the fact that there are now more regulations in our industry. I think the one thing that needs to be a priority is AML regulations which are looked at by HMRC - more and more agents are ending up on the HMRC money laundering offenders list and I've seen some branches using that in local markets to dissuade vendors from using certain agents, so it's important that agents take changes in regulation seriously, whether it’s material information or AML, it’s about making it as easy as possible to comply and avoid anything that makes you stand out in the market as not ‘getting it right’.
Practically, what can agents do to get prepared for material information changes? Looking into your platform as well as others, but what practically can they do right now?
They need to review their processes now. It's common sense what Trading Standards are asking of agents: to make sure that anything a client should be aware of is there, front and centre. And with the delays currently in the process, this is all for the greater good of getting houses sold and improving the consumer experience.
Agents can take the opportunity to review their processes and do that manually by downloading titles, reading the titles for review and so on, or they could partner with a local law firm who could legally prepare the information for clients. I think it will be interesting to see if this is a route the industry goes down. Or agents can look at solutions that solve more than one problem.
Our iamproperty movebutler platform provides instantaneous reviews of a title, and we provide free title insight reports too, that pull all this information from the title and provide it to agents.
There are a lot of PropTech solutions on offer, but which ones specifically can support agents with material information?
I think agents must be careful with PropTech, even as a provider myself I say that because there is so much on offer, but lots of solutions only deal with very small parts of the process. If agents aren’t careful, they could get bogged down working with too many providers and it can mean high costs and lots of time to go out and review the best solution to one or two issues.
Where I see PropTech working properly in agencies is where it will either remove an administrative task, drive efficiencies and revenues or improve a consumer’s experience. Where I don't think PropTech should be used is where it gets in the way of the relationships that the agents create with their clients, and some PropTech does, so sometimes the old ways are the best.
If I was an agent and considering signing up for a new supplier, I'd make sure that I spoke to other agents who have been using a system for some time, making sure to ask them for honest feedback. Obviously, I realise there are review services that digitise that process, but it’s about knowing where to go and making sure that you can talk to agents that have the experience to make sure you know what you’re getting.
Visit the iamproperty website to find out more about movebutler or book your demo.