This is The Property Ombudsman statement in full:
The Property Ombudsman scheme (TPO) is providing responses to the Department of Business, Innovation and Skills (BIS) with regard to proposals to amend the Estate Agents Act 1979.
However, as TPO is a redress scheme and not a trade body, it was for BIS to invite responses and for trade bodies who have been consulted separately from TPO to invite industry members to comment, said Gerry Fitzjohn, Chief Operating Officer of TPO.
“Both the council of TPO, through the Ombudsman, Christopher Hamer, and the board, through its chairman, Bill McClintock, and myself, have had robust discussions with BIS on revisions to regulations for estate agency,” said Gerry Fitzjohn. The TPO responses, via both the board and council, will be delivered to meet the Friday deadline set by BIS.
“We have told BIS in a face to face meeting on July 11 that far from reducing consumer protection and introducing consumer confusion, BIS should be doing more to bring lettings agents within the scope of the Estate Agents Act 1979 because there are real consumer protection issues.
“In our written response, the Board makes it clear that its immediate impression of the proposals is that consumer protection will be eroded. We recognise that the Government is striving to reduce regulation and restriction on businesses, but the proposed amendments quite clearly open up opportunities for the consumer to stray unknowingly into an environment where the protection they might expect to have is not in fact available to them.
“Given the generally held negative view of agents operating in the property sector (albeit largely anecdotal but more evident in the lettings sector), it appears inconsistent for consideration to be given to diluting agents’ legal obligations.
“Whilst recognising that the government is opposed to broadening regulation, we continue to emphasise – and this view is supported by industry and consumer stakeholders – that is it possible to cite examples or reports / surveys supporting the view that legislating for letting agents should be a priority and therefore that broadening the scope of the legislation is what is required, rather than narrowing it.
“We are telling BIS that the current, well-established legislation is not a burden on business and serves consumers well. The existence of approximately 14,000 estate agencies in the UK also demonstrates the ease of entry to the industry.
“We do not believe that ‘estate agency work’ as defined in S1 of the EAA causes uncertainty about the scope of the act. There are numerous online estate agencies already trading, and many of the sites provide a matching service and are members of or registered with TPO.
“Consumers will not draw a distinction between an estate agent and somebody that looks and feels like an estate agent but isn’t. They should not be misled into a situation where, having paid money for a service to market their property and regardless of there being distinct difference in price, different laws and differing levels of consumer protection actually apply.
“The growth in the number of estate agencies since 1982 seems to suggest that the definitions are not problematic or off-putting.
“The Consumers, Estate Agents and Redress Act provides safeguards for the consumer with each sales agent required to belong to an approved redress scheme.
“The redress scheme requires compliance by the sales agents (in the case of the Property Ombudsman Scheme) with the consumer codes which are approved by the OFT. We believe that some organisations may see this as a barrier since they do not wish to comply with OFT approved standards.
“It is not clear whether agents that ‘escape’ EAA obligations have any responsibilities under the Money Laundering Regulations and whether this potentially creates a risk.
“TPO also thinks it is unclear what is meant by a ‘low risk’ service to buyers and sellers. There is potential for considerable issues. Sellers will have to work out their own asking price and may sell at below market value. Should this happen they would have no recourse to redress. Buyers could be at risk because sellers using a ‘passive agent’ website could be introduced to properties that have been dressed up for sale. An estate agent conducting business under EAA, PMA, CPR regulations could not allow this to happen. Buyers could be more, not less, confused.
“Existing agents may decide to start a new model outside the Act which would be confusing for consumers. Consumers will simply not understand the difference between an ‘EAA agent’ and the passive agent. They will assume the businesses act in the same way and that they, as consumers, are protected in the same way.
“We believe that all property sales should be inside the Act with the exception of private sales.
“We firmly believe that regulation should be strengthened, particularly in regard to letting agents who are currently not governed by the Estate Agents Act.
“The Act should be extended to cover letting agents in order to raise standards and provide consumer protection to this growing industry.”
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Comments
Hi Martin,
INEA stands for The Independent Network of Estate Agents which is a UK MLS (multi-list). I help agents cross share their listings to other agents to gain greater exposure to more buyers.
BUT ONWARDS: The proposal says that new models may link the buyer directly with the seller. My background is estate agency i got in the game in 1986. I always had the policy that we would accompany viewers when clients where elderly or vulnerable. If staff were an extra long time we'd call to check they were Okay. If no response a member of staff would go to the premises. We never had to do it, but next we would have phoned the police if still concerned.
Elderly or vulnerable may not have a friend nearby or relations may be miles off. A system that links bogus buyers with sellers with no one to be at hand is opening the doors to invite wrong types in.
In 1986 Suzi Lamplugh went to meet a viewer and was never seen again.
The well being of homesellers is far more important that budget fees. Agents have safe guards in place, in the event things don't happen as they should, or can accompany when need be.
If no one checks the homeowner - how long could they be laying there - 1-2-3 days?
Martin H - answered on the other thread where you posed the same question.
Hi Trevor Mealham, what do the letters "INEA" after your name stand for? (I just thought I'd make it clear that I'm not being sarcastic as I know text can sometimes be taken the wrong way).
Also, apart from physically being there while a viewing takes place what else can an agent do to like you say "create a buffer to bad viewers" or "qualify applicants"? After all criminals don't tend to go around wearing black and white stripes with sacks labelled "swag".
I suppose what I'm trying to ask is what specifically can a good agent do to "safeguard consumers" that a good friend or family member can't? A robust and specific answer to this question is what's required to qualify Trevor's claim that estate agents are safeguards. A good answer would help the public decide whether there is a true benefit to choosing an estate agent for safety reasons. This could help agents if answered properly.
If the proposal goes ahead, wait for the first headline reading:
BOGUS BUYER BEATS VULNERABLE ELDERLY HOME SELLER.
A web connecting site for buyers and sellers direct does not safeguard lone vulnerable home sellers from bogus pretend buyers. Would you want your granny alone with a thug in her own home? But then she could have sold cheaply :-)
Good agents value the well-being of their customers and create a buffer to bad viewers and put in place systems to qualify applicants such as accompanying viewings to safeguard consumers.
If the current proposal to change the 1979 Estate Agents Act goes to parliament after tomorrow (Friday 10th August) with the recommendation from BIS (The Department of Business, Innovation and Skills), then the housing market opens the door to put anyone in touch with innocent sellers .
Agents TODAY provide a true personal service including accompanied viewings. To make a system where bogus callers could pose as buyers BIS would be opening thugs and criminals through the door of innocent elderly and vulnerable home sellers
Beyond cash saving, such new web models compromise Joe Publics well being.
We receive their emails once a year without fail to notify payment is due and that all the communication we ever receive. Nice to see they are actually working for their members? Great litlle business!
Funny TPO should mention existing agents may create a separate parts of their current business model to act outside the act. Looking rather similar, but not... as it were.
It has been discussed here, and, that is exactly what we decided we would do yesterday. Plans to create such a beast being discussed today.
Not a good way forward, but if it's what Government want the industry to look like, we cannot buck this alone.
I wonder how many other agents are thinking exactly the same way as us.
Ok, it isn't a trade body but surely it is in TPOS interest to get support in objecting if they don't require some sectors of the industry to belong to a redress scheme?
Why couldn't they have alerted us by just issuing a press release saying they were opposed to the BIS proposals and then everyone would have said 'What proposals?'
For gawds sake, we're all on the same side on matters like this.
Typical of the TPO to use the opportunity to get lettings redress, that would double all those yearly cheques.
They do seem to have a very good email system which alerts us to when the yearly fee is due, shame they couldn't at least put out a generic email to all with a wee bit of info.
Good job we have EAT to do the job for them.
Thanks TPO, cheques in the post!