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Written by rosalind renshaw

A lawyers’ field day looks to be on the horizon after experts disagreed on what needs to be disclosed in property marketing under a legal regime which now dispenses with the Property Misdescriptions Act.

According to the NAEA, difficult and sensitive issues about a property that relate to previous owners should be flagged up, not just before a transaction but before any viewings.

These would include murders or suicides.

Industry leaders say that the Consumer Protection from Unfair Trading Regulations 2008 – not new, but which have now entirely replaced the PMA – could prove far more challenging than many agents think.

Housing minister Mark Prisk also takes the view that personal information must be disclosed.  

This includes any information about previous occupiers which might affect a consumer’s decisions as to whether to view, rent or buy.

However, a leading property lawyer – David Smith, of Anthony Gold – said he disagreed with this interpretation.

Another property expert, David d’Orton Gibson, said the difficulty with disclosure was that so much is highly subjective and would boil down to an agent’s personal judgement.

Mark Hayward, managing director of the NAEA, insisted that agents must make disclosures before viewings which could include any recent suicide or unexplained death at the property, whether a paedophile has lived there or if there are likely to be two property chains involved as a result of the vendors divorcing.

Hayward said that disclosures required under the CPRs extend to far more than saying whether the property is close to a railway line or wind farm.

He also warned agents that the CPRs carry criminal penalties, including unlimited fines and jail sentences.

A further hazard for agents, said Hayward, is that whereas the PMA – which became defunct last week – made agents responsible for property descriptions, the CPRs make sellers and agents jointly responsible.

In addition, the CPRs also apply to rental properties, giving letting agents and landlords joint legal responsibility for the accuracy of property descriptions, including the duty to disclose.

Hayward said: “Under PMA, agents had to be honest about their descriptions, but caveat emptor applied. The big difference is that caveat emptor has now been replaced by making the agent responsible for making prospective buyers aware of anything that might make them not even want to view the property.

“For example, not everyone would want to view a property where someone had taken their own life.

“Agents would have to disclose whether there was a school nearby, even if the address was in School Lane, and would be expected to find out if a public footpath by the side of the property was used by noisy customers of a nearby pub.

“The duty of disclosure must be taken seriously: the CPRs will be closely policed by Trading Standards and there are significant penalties for agents who get it wrong.”

He said that while it might not always be appropriate to flag up problems in a property advert, prospective viewers should always be alerted to these – for example, by a note telling them to contact the agent before viewing the property, even if just externally.

Property ombudsman Christopher Hamer said he agreed with Hayward’s interpretation.

He said that some sensitive points might not be flagged up in advertising for reasons of sensitivity, but should nevertheless be disclosed “at the earlier practical opportunity”.

Hamer said: “For example, if someone spots a property on a portal and phones the agent to say they will be travelling a long distance to view it, then the agent at that point should disclose proximity to a graveyard, murder, etc. And record that they have done that.”

Hamer produced guidelines for estate agents earlier this year and is in the process of preparing advice for letting agents. However, his guidelines for estate agents differ slightly from Hayward’s interpretation as to when to disclose an event such as a suicide – Hamer’s advice says this could be done at a viewing.

David Smith, who specialises in property law at Anthony Gold, said he disagreed that information about previous occupiers needs to be disclosed to prospective buyers and tenants.

He said that this was “certainly not” how he would interpret the regulations and that previous occupiers were irrelevant. Guidance from the OFT said nothing about this, he said.

However, Smith cautioned: “I do agree that proximity to motorways is relevant and it would also be incorrect to make a generic statement such as it being a quiet area without proper investigation.

“I would also agree that some of this needs to be done on primary advertising as the offence is committed if a transactional decision is made.”

David d’Orton-Gibson, of Training for Professionals, said: “The key test for disclosure is you should disclose any information that might cause a consumer to make a different purchasing decision. It is Mark Prisk’s interpretation that this means telling of a previous paedophile, etc.

“This is really difficult as actually it is very much a judgement. For example, if you are told the house is haunted, do you declare this? Do you, or the potential viewer, even believe in ghosts!

“What will influence purchasers will be very different. One may like the park at the rear, another may not like it and consider it a security hazard.”

D’Orton-Gibson also said that under the regulations, agents who are members of a body such as ARLA must obey the organisation’s own rules.

He said: “The logic is, if someone uses you because you are an ARLA member, they should be getting that benefit and you comment a criminal offence in not providing that benefit.”

Under the new regime, agents may also have to give reasons for any previous abortive sale such as a bad survey or a down-valuation. However, the only case so far to have made the courts under CPR was thrown out on appeal, and so there has been no proper test on these points – yet.

Here’s how we reported it.

http://www.estateagenttoday.co.uk/oldeat_news_features/Landmark-case-over-property-description-to-set-precedent

http://www.estateagenttoday.co.uk/oldeat_news_features/Judge-rules-agent-did-not-mislead-buyer-in-mine-shaft-case

Comments

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    Can someone please tell me where I am supposed to find information on whether or not a property is associated with: ‘Murder, Suicide, paedophile Etc. as I would really like to know which government department will provide me with such information so I can comply with their even more even more ridiculous legislation.

    I look forward to hearing from anyone who has the answer to this question. Or do we all have to become ‘Miss Marple’ ?

    Hmmm!

    • 09 October 2013 17:25 PM
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    " Just put a house on sale and said absolutely nothing at all about it

    Where does that leave me then?

    Just photos and a price............


    Well you must make sure that the price is accurate and that the photograph is a true representation (e.g. not a close up cutting out the nuclear power station behind)"

    ...and hope to H£ll that there's nothing that you SHOULD have said that, by failure to include it in ALL MARKETING MATERIAL will land you with a chuffing great fine - or a spell in a desirable upscale 8x10 one-up, one-down playing biatch to BIIIIG Tony... ;o)

    • 09 October 2013 09:32 AM
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    Just put a house on sale and said absolutely nothing at all about it

    Where does that leave me then?

    Just photos and a price............


    Well you must make sure that the price is accurate and that the photograph is a true representation (e.g. not a close up cutting out the nuclear power station behind)

    • 09 October 2013 09:16 AM
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    As usual media get it wrong and make watchdogs panic.. We work for the vendors...end of.

    If you want to know anything else get a decent solicitor to check everything for you.

    As always , one idiot who sues ruins it for the 99.9% of people who actually have common sense.

    • 08 October 2013 15:29 PM
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    Just put a house on sale and said absolutely nothing at all about it

    Where does that leave me then?

    Just photos and a price............

    • 08 October 2013 12:40 PM
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    Time to retire...........

    • 08 October 2013 09:12 AM
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    In a nutshell bring back the PMA it made us abide by the rules in 91/2 and worked ever since so why change? This is just Civil Servants making life hard for the industry. Let’s face it "houses sell themselves" we just market them?

    This country is going into info over load should we state that the house next door was bombed in Second World War so could have issues? Utter tosh......

    • 07 October 2013 18:58 PM
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    Transparency doesn't really fit with sales, but thats what we are...sales people. The problem is we're sales people not allowed to sell anymore and It's ironic really, given that 'buyer beware' was always our defence; at least now they'll finally have all the information so we can actually say it with a straight face.

    We can't claim a profession, and then be selective with our professionalism so by failing to be great we're having greatness forced upon us and the sum of our total is information. Full disclosure will erode the opportunity to 'close' whilst we quickly become a glorified display for the window shopper...

    • 07 October 2013 17:41 PM
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    Gawd, so we are to ask if there was a previous paedophile at the house? So I imagine a current one in the area too? Er, so do we declare travellers in the area? When to we start to get into the conflict between disclosure and discrimination? I fear we already have.

    • 07 October 2013 16:06 PM
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    A year ago or so on this website I aired how a leading repo company had withdrawn their instruction to me, as my details showed that the property was a repo. They wanted me to remove all yellow & black tape, make the house look as normal as possible, and deny it was a repo until an offer was made (at which point I had to publicise the offer).
    I refused to amend my details, so lost the business. Most who responded to this situation via EAT sided with the repo Co saying they had to get as much as possible, by misleading the buyers.
    Kindly bear in mind CPRs if you are asked to market a repo, and make sure you state this in the ads. The address will be blighted for some years after all, and buyers won't like having their offer advertised for all to see. I really don't care for the way the repo companies treat agents & buyers.

    • 07 October 2013 15:58 PM
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    '........Are we being legislated out of existence by the back door?......

    Yes.

    • 07 October 2013 15:42 PM
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    Seems unfair about a Paedo in the area, hows anyone going to sell with that scumbag around?

    • 07 October 2013 15:15 PM
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    BTW I'm not suggesting that you should misbehave in any way, for me this is about covering all my bases.

    Include a general area info section that is repeated for all properties in such and such a postcode.

    Include a transport section likewise.

    Ditto schools.

    Mention road names, etc.

    Local history, etc.

    You do not tailor it for each property as this would be unfeasible, but you could do it per postcode.

    • 07 October 2013 13:47 PM
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    After reading several (but not all - life's too short) of the comments here it occurred to me to ask some questions.

    What is the job of an estate agent?

    Are we being legislated out of existence by the back door?

    But then it occurred to me that in this day and age of information overload, all you really need to do is provide people with 30 page brochures, essentially filled with local nonsense info that basically covers all bases.

    You include each topic area with suitable disclaimers.

    You don't print them out, you just send links from your website.

    It's also on RM, Zoop, AM (when it launches), etc.

    You make it as relevant as possible and you add in the details you can confirm.

    Maybe even get the owner to fill in a Property Information Form that gives you extra info to include.

    Most buyers/ tenants won't read past the second page and will certainly stop looking after the 2nd page of no photos.

    That covers you for disclosure issues,

    • 07 October 2013 13:42 PM
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    Hound - I think that is a good example of how to conduct yourself as an agent in these situations.

    Obviously you cannot know everything. A fair rule with regards to the info you DO have, is to offer it in the same way you would want it to be given by another agent selling to your family.

    Dealing with a buyer professionally gives you that opportunity to win them over, long before they even consider selling. The good agents have that long term vision anyway.

    • 07 October 2013 12:31 PM
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    After a varied career, firstly in the legal profession dealing mainly with conveyancing in the late 70's and then surveying and estate agency in private practice throughout the 80's I was fortunate enough to sell out the "family firm" in 1988 to one of the nationals. I could have retired at 32 but chose to continue because I enjoyed the job. Foolish me, as I hated corporate agency at the top of the ladder, so I did retire at 35. It was unethical and driven by a pure greed for profit. Two years later I was so bored I started all over again. Once again I enjoyed a fruitful, enjoyable and successful career running my own agency. I reached 57 last month and have expected what is coming for a few years now. It was only a matter of time before the pointless regulation and legislation "judged" by the likes of Christopher Hamer killed any enjoyment in what used to be a profession. For the second time I am hanging up my hat. I've never hidden anything and this has stood the test of time. Clients have returned to buy and sell for decades. This is a tribute to professionalism and being told by an unqualified bumpkin at this stage of my life is simply unacceptable. What a shambles!

    • 07 October 2013 11:27 AM
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    I think common sense is the key here, we, as agents cannot necessarily be expected to know about something that happened years ago, but if we do know from local knowledge of something that may be off-putting to a prospective purchaser, then declare it.

    With a property were a sale has fallen apart because of a bad survey, I, and I'm sure I'm not alone in this, have endeavoured to find out the exact problem, and deal with it with the vendor if possible, or make any prospective purchasers aware of the defect.

    Several years ago, I sold, for a developer client, a new build backing on to a cemetery where the victim of a high profile child murder was buried, the property proved very difficult to sell, and in the end, so as not to waste my time with abortive viewings I told anyone that expressed an interest, several then declined to view, but in due course a buyer came along who was not bothered and a successful sale resulted.

    • 07 October 2013 11:01 AM
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    And, to add another dimension, where is the cut-off point to decide if something is "material"?

    My friends elderly parents have lived in the same house for about 40 years. They've always known that the previous owner topped himself in what was then the garage but is now the dining room.

    When one day they decide to sell the house do they and their agents need to declare a tragic event that happened when the Bay City Rollers were top of the charts?

    • 07 October 2013 10:35 AM
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    Standard clauses/paras/T&Cs are a good idea but never hold your breath on this one.

    I worked in the building society industry for well over 20 years and in all that time the BSI tried to get a standard valuation form to be used by all society members and never got anywhere near achieving it.

    Why?

    Because the members all used staff surveyors who belonged to different bodies. Plus all the societies wanted their own versions because there were matters they just had to have included.

    Be careful what you wish for anyway in standadisation, otherwise you'll end up with a situation like TDS imposing a load of clauses for the deposit section of agreements.

    Then someone else will have a long list for what impacts on their area of interest, and before you know it the tenancy agreement will be 30+ pages long, like a sub-lease.

    • 07 October 2013 10:31 AM
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    We are going to have to 'informed guess' on this until/unless some standard paragraphs for our contracts are provided after consultation between NAEA, TPO & TSI ... oh, that would be a good idea wouldn't it?

    I met Chris Hamer recently & he was very helpful. Re disclosing that a sale had fallen allegedly due to a bad survey he said that if we felt that the bad survey had caused teh sale to fall, we must say so. If we felt that 'bad survey' was being used as a spurious excuse by an embarassed buyer then if a case was brought to him and he did not agree with us, and we had not mentioned 'bad survey' as the cause of fallen sale then he would find against us.

    It is becoming increasingly difficult to be a correct agent. I do feel that we deserve a few more relevant standard paras for our contracts, approved by these 'parent' bodies as clear evidence of due diligence. How about it NAEA, TPO & TSI ? If you with your lawyers can't work out some good paras how can we be expected to get it right?

    • 07 October 2013 10:11 AM
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    @ Trevor Mealham INEA on 2013-10-07 09:28:13
    Mark Hayward.
    Mark Prisk

    I do not usually communicate in this way but I ask you to please get real!

    In my view, all of this should be the job of the conveyancer in conjunction with the client. The agent can pass on only what they are actually told - in addition to normal business practice and the associated transparency? Or should they all become lawyers?

    What a country we are becoming. Field day for lawyers indeed.

    • 07 October 2013 10:08 AM
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    Those who want to be left alone and just get on with it in the manner they think best and should suit all usually fall back on the common sense argument.

    There is only one major flaw in that approach - common sense is not all that common, in fact it is often rare and in short supply. And nowhere more so in purchasing terms than where property is concerned.

    One thing I would suggest is certain is that if the problem emanates from next door or above, and the same owner/Landlord owns that property, then the fullest disclosure is almost certainly needed.

    • 07 October 2013 10:02 AM
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    Are you kidding me?

    “For example, if someone spots a property on a portal and phones the agent to say they will be travelling a long distance to view it, then the agent at that point should disclose proximity to a graveyard, murder, etc. And record that they have done that.”

    Are agents and their vendors to become psychic mind readers? What may upset one person would not bother another! Do we need to make a set of details and separate list of what may upset someone. A gay couple next door would upset my parents but not me. What do I do there?

    All common sense just left the building.

    • 07 October 2013 09:28 AM
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    Its simply about agents being transparent.

    Had a property years ago and the owners said they had a friendly ghost. When we asked Trading Standards do we need mentuioned this or not. The response was. ''Is the supposed ghost the reason for sale, or are they moving for another reason''

    The property was on the Romney Marsh, and the owners moved for work in the City. Not due to Casper being there (or not). We added mention to details. But were told they we didnt need to.

    Its simply report what you see, and don't leave out what might put people off - and let Joe buyer make their mind up.

    • 07 October 2013 09:28 AM
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    What about when the neighbours are ginger?

    Hamer is in cloud cuckoo land.

    • 07 October 2013 09:13 AM
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