CPRs; the practicalities
21 August 2018 5563 Views
In our previous blog, we looked at the definitions outlined by the CPRs. In our next blog we’ll look at the practical application of CPRs, the sorts of scenarios that come up day in day out and what lessons we can learn from any enforcement action taken.
When it comes to the monitoring of CPRs, estate agents are policed by the National Trading Standards Estate Agency Team (NTSEAT), based at Powys Council. And locally can be picked up by local authority trading standards teams, depending on the nature of the complaint.
Additionally, we see CPRs referred to in enforcement action taken by the ombudsman schemes (TPO & PRS), which stipulate as part of an agent’s membership of the scheme they comply with CPRs, and the Advertising Standards Authority (ASA).
Although CPRs place the onus on both the agents and vendors to provide material information, the commercial realities for agents are they must largely rely on the word of the vendors. They are not expected to undertake extensive or costly investigations… unless they know otherwise…
Our case studies provide some practical real life examples of CPRs in action.
Should an agent reveal information relating to local development
Our first case study looks at a common issue among home buyers… the preservation of views and/or surroundings. And, as all agents know, there’s no such thing as guaranteeing a view…
When is a loft conversion not a loft conversion
Our next case study involves an issue agents will see plenty of… a lack of building regs certification. The Property Ombudsman (TPO) awarded £1000 to a would-be purchaser after the failure of the selling agent to provide the buyer with information relating to a loft conversion.
Freehold vs Leasehold
In this case study the buyers were clear and up front with the agent about purchasing a freehold property, not a leasehold. The failure of the agent to identify this as material information and investigate it thoroughly cost him his fee
This time its personal
Every one has a story to tell when it comes to buying a house. When we bought mine we had an offer accepted, instructed solicitors, searches and surveys only to find that 1/3rd of the garden was missing from the Land Registry plan once the sellers pack came through.
When we investigated we found that the land was owned by a third party with a rental charge and were also told that a previous sale has fallen through because of this.
Even if the vendor had not informed the agent at the outset, because a previous sale had fallen through, this now constituted material information and should have been updated on the sales particulars. The failure to do so was a clear breach of CPRs.
We decided to proceed but reduced our offer. It wasn’t a great experience all round, and could have been avoided by simply researching the title plan from Land Registry at the outset… so we can all learn from our mistakes!
The practical advice is to err on the side of caution and be proactive. As with all compliance activity, it is important to establish a process for asking the right questions and evidencing your activity.
If you do have complaints raised, it is important to be able to demonstrate how you asked the questions and document all responses.
Compliance in a Box from Landmark is the simple pay-as-you-go compliance toolkit.
Make sure you are asking the right questions of your clients, and documenting their response. Compliance Packs help agents fulfil their obligations under CPRs and AML. From one account source:
Electronic property information questionnaire & fixtures & fittings form for CPRs
Electronic client verification for AML inc PEPs, Sanctions & Checks
Land Registry ownership & boundary confirmation
Foreign national checks... and more
with a complete time and date stamped audit trail of all compliance activity.
For more information about reducing your risk please contact Compliance in a Box on 01524 220013 / firstname.lastname@example.org
AML Fines for estate agents...
Implementing your risk assessment ...
What are HMRC looking for?...
What is the risk? ...