x
By using this website, you agree to our use of cookies to enhance your experience.
STAY CONNECTED!
    
newsletter-button

Cooling off campaign launches today

25 March 2009
Written by Rosalind Renshaw

A campaign is being launched today to test in the courts whether cooling off regulations apply to agents.
 
The move, being spearheaded by Spicerhaart which is calling for industry-wide support, comes about as Trading Standards are said to be beginning to lean on agents in parts of London and are threatening prosecution.
 
Agents face potential fines of up to £5,000 – although Spicerhaart insists that cooling off regulations do not apply to agents.
 
The new regulations came into effect last October, accompanied by little or no publicity. Only now are agents waking up to their potentially massive impact which could see them fined or having to delay marketing for seven days.

Called the Cancellation of Contracts Made in a Consumer’s Home or Place of Work Etc Regulations 2008, they specify that people who sign contracts with traders in their own home or workplace have a seven-day cooling off period, during which they can change their minds.
 
The cooling off applies whether traders make solicited or unsolicited visits.
 
But the regulations explicitly state that cooling off does not apply to contracts for “the construction, sale or rental of immovable property”, the only exceptions being for home improvements such as double glazing. 
 
However, the OFT has advised agents that in its opinion cooling off DOES apply to all agency contracts signed outside the agents’ own offices. The NAEA has accordingly passed on this advice to its members. However, the OFT has qualified its view by noting that this is not a definitive legal view, which can only be provided by the Courts.
 
Paul Smith, Spicerhaart’s boss, said: “We strongly believe that the immovable property exemption means that estate agents are not subject to the cooling off period. Houses or flats are immovable property.”
 
He said that the OFT’s position defied “all logic and basic common sense”.
 
Now Spicerhaart is mounting a legal campaign.
 
Its corporate development director Lucian Pollington, who is a solicitor, said the OFT’s interpretation of the regulations was difficult to follow. He added: “We simply cannot see how they apply to agents. We also think it is time for someone to stand up for the industry and do something for agents.”
 
Pollington is suggesting that agents back Spicerhaart in an action which would see the industry asking for a High Court declaration as to the meaning of the regulations.
 
Pollington said he thought the Court might well rule that, at the very least, the meaning was unclear. Making the application would also give the industry time to take a good look at the rules rather than be railroaded into implementing far-reaching changes to the industry’s working practices which, he said, have been suddenly announced with little or no warning.
 
The likely cost of mounting the legal challenge to the OFT is in the region of £30-£40,000.
 
The battle lines are being drawn over the existing cooling off regulations, but an even more stringent regime could be on its way. The EU is proposing that cooling off be extended to 14 days, and also cover letting agreements.
 
Agents interested in backing the action against the OFT should email coolingoff@spicerhaart.co.uk

Comments

  • icon

    I was told by the OFT that if we agreed a sale in the first seven days of marketing hip allowing, the vendor could then cancel our contract. Then sell to the buyer directly and we could not be sure we would get our fee. So the answer seems to be apart from ordering the Hip, do not send round any viewers for 7 days. However the doorstep selling regs only apply if the contract is signed at the property! If it is signed in the office I was advised the regs did not apply!

    • 27 March 2009 10:59 AM
  • icon

    Trouble is you're not selling property or any other immovable object. What you are doing is selling the service of introducing a client (and property owner) to a prospective buyer. No tangible asset passes between you and your client. The case is even more clear with lettings, yet the service provided by agent to client is essentially the same.

    • 26 March 2009 18:46 PM
  • icon

    Martyn you are right lets see if they do......like most things i very much doubt it!

    • 26 March 2009 17:56 PM
  • icon

    It clearly states that it "does not apply to the sale of immovable property" - Are we all agreed on that? The last time I examined any of my properties they were all "immovable"! One of my clients told me that if his house in Ramsgate was in London instead it would be worth a lot more. Perhaps one of the halfheads from the OFT could shift it for him!

    • 26 March 2009 15:30 PM
  • icon

    There can be no doubt that the cooling off period does include estate agency contracts. The Consumers, Estate Agents and Redress (CEARA) Act 2007 specifically details the fact in relation to estate agents. A legal challenge would merely confirm the issue. It would be an expensive own goal.

    • 26 March 2009 14:43 PM
  • icon

    But is it "badly written legislation" Mr Osbourne? To me at least, the wording couldn't be clearer - it wasn't meant to apply to us. It's just a pity that it has to go to court (which is expensive) to get a definate decision, when the law makers could have given examples of what was covered and what wasn't covered at the outset. I know that's not how it is done normally, but perhaps that should be changed.

    • 26 March 2009 12:51 PM
  • icon

    It is a sad day when an individual has to go it alone when there are so many so called associations supposed to support it's members. Well done Spicerharrt, you get my vote.

    • 26 March 2009 12:03 PM
  • icon

    Brian and Martin have hit the jackpot. The only reason why the Governmentn get away with all this farce and HIPs is the industry stakeholders/leaders are weaklings. Their members tell them there not happy, do they care YES but they do nothing and before anyone says yes they do, after 8 years what have they achieved with HIPs debacle? All hot air and no guts. Members of RICS and NAEA should call for a vote of no confidence in their boards without delay and get someone employed who is prepared to stand up fight and not whimp.

    • 26 March 2009 11:58 AM
  • icon

    I recently went to a meeting held by OFT and Trading Standards. They told us about the cooling of legislation which seemed utter madness. I said that if a vendor had read and had a copy of our agreement seven days prior to marketing (which often happens) surely that would be ok. They insisted that it was 7 days from signature. Two days latter my local trading standards officer said he did not think it applied to us because of the immovable object clause, then a day later having spoken to OFT he said it did apply to us. Short of changing the locks on our offices how desperate are they to shut us all down!!

    • 26 March 2009 11:53 AM
  • icon

    I thought that HIPs and the end of first day marketing have resulted in an enforced cooling off period anyway. At least the OFT are consistent !

    • 25 March 2009 13:34 PM
  • icon

    NAEA and RICS take note. Make a stand on this for your members!!!!!!!!!!
    M

    • 25 March 2009 11:42 AM
  • icon

    Its amazing how lamb like the RICS and NAEA are in this matter.

    Do we Members pay them to be like this or should we give them a "first warning" and make them start to represent our interests for which we pay them?

    Frankly a bodies set up by Members to protect and represent them they are as useful as a chocolate fire guard!

    • 25 March 2009 11:02 AM
  • icon

    Once again as with Housing Act legislation in respect to letting deposits, this is yet another case of badly written legislation which will only serve to provide fodder for solicitors, lawyers and others in the legal profession.

    • 25 March 2009 10:56 AM
Breaking News
MovePal MovePal MovePal