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By David Beaumont

Managing Director, Compliance Matters


Material Information Guidance - A Critical View

In the first of a short series of articles, David Beaumont, managing director of Compliance Matters, casts a professional eye over the new guidance.

The Consumer Protection from Unfair Trading Regulations (CPR) were introduced in the UK in 2008 and they applied to all businesses in the UK from that date. Estate Agency had a delay in any enforcement due to the fact that The Property Misdescriptions Act remained in force until 2013.

You will be surprised to learn that trading standards have never in 15 years issued guidance on CPR to any business sector that has included specific aspects that they deem to be material information.  So the publication of this guidance was a significant step for trading standards and it’s more than a significant step for agents.


I took some time to review and consider it, because at a basic level I believe that clear guidance benefits everyone: agents and consumers. I was worried it would stretch the boundaries too far and miss the target. For me it definitely does both. This might surprise some of you given my trading standards background and my support of strong consumer protection and enforcement.

It is interesting that every organisation on the steering group is 100% behind the guidance and of course all the associated businesses that will potentially benefit from it are behind it. Surprisingly, there has not been one critical voice heard in the agency media. Not one! Given the significant change this makes to the estate and letting agency business model I would have expected someone to stand up for the traditional business model. Perhaps I am the only one that’s critical of it?

Selling process

However, I am critical, firstly because the guidance outlines 21 areas where there is or might be material information to disclose to potential buyers and I don’t think many of the areas are material information.

Traditionally, an estate agents initial role is to market a property to get interest from potential buyers. They point out the main features of the property – the address; the type of property; the number of bedrooms. the sizes of the rooms; a plan, and anything else they feel is appropriate, including anything that they should be aware of that might be material or detrimental to the average buyer.  The agent then gets potential buyers to view and finally, they get potential buyers and sellers to agree a sale informally. The emphasis should be on the word ‘informally’ or if you like, ‘subject to contract’. Once that informal agreement is made the actual ‘selling process’ starts.

Before I go any further I need to go back to the Regulations, because they state that businesses (agents) should act with professional diligence, which is defined as ‘the standard of special skill and care which a business (agent) may reasonably be expected to exercise towards consumers’. General government guidance on CPR clarifies this and states, ’The word ‘special’ is not intended to require more than would reasonably be expected of a business (agent) in their field of activity’. 

The National Trading Standards Estate and Letting Agent Team did agree with this because in their previous CPR guidance to agents they stated on page 9 that “At the outset of the marketing process, you are not expected to research issues that are outside your line of business, for example, where your business is marketing property and the issues are those that a surveyor or conveyancer would investigate.”

Engaging 3rd party professionals has never been something that is ‘reasonably expected’ of an agent. Most professional estate agents have never done so.  How then can it now be the case that NTSELAT state that compliance, “may require, where applicable, the engagement of a conveyancer or surveyor, which can either be via the client themselves, or via any additional services offered by the property agent. If such a service is provided, any charges should be outlined and explained to the client up front …”

Plus, there are over 90 online links provided within each guidance document for agents to use when they are instructed to market a property. 90% are not used by agents currently.  Granted, not all apply to every property, but even if only ⅓ are relevant how long is that going to take and there are costs involved in using some of them.

Solicitors to provide

How did it get to this point? It makes no sense and it is clearly stretching the boundaries of estate agency way too far.

This whole process has been side-tracked, but the notion is that providing all this information will reduce fall throughs. It will not! Trading Standards have missed the real target. Solicitors. Their delays cause a significant number of fall throughs. So what they should have done or should do is go after solicitors to provide this information ‘up front’.

Solicitors are not exempt from CPR. The Law Society agree with that; however, as we know, solicitors follow the old legal expression ‘Caveat Emptor’ or ‘buyer beware’ and so they go through this drawn out, back and forth conveyancing process that works for no one other than solicitors.

We all know that traditionally the conveyancing process is initiated by the potential buyer who gets a survey and their solicitor starts to do the searches and request information from the seller’s solicitor. They then check all the issues, i.e. all the material pieces of information and report back to the potential buyer and, if the buyer is happy with everything they and their solicitor discover, the sale takes place – generally, estate agents are nowhere to be seen during this process.  

Surely, solicitors acting for the seller have an obligation under CPR to provide all the material information up front and not wait to be asked for it and drag it out for weeks - often months? That’s would prevent a large percentage of fall throughs.

Perhaps they are not as easy a target!

  • Shaun Adams

    You say it will not reduce fall-throughs.

    So buyer one sees more upfront info
    Buyer two doesn't

    Who is more likely to pull out when they learn something after two months they didn't like that may have been on the MI?

    David Beaumont

    I accept your point to a degree. What I am saying is that property transactions falling through due to that are few, whereas those caused by solicitor delays and incompetence cause the vast majority, so the focus should be there.

  • Shaun Adams

    But that is a separate matter

    Your piece is headed - Material Information Guidance not Solicitor delays

    A large part of solicitor delays is the two months to do enquiries - more upfront info will equal less enquiries. See our Buyer Information pack on our Cooper Adams website


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