The effects of new regulation reform for Estate Agents
The proposed changes to the regulation of Estate Agents, made official in the Queen’s speech, are now set to go ahead, but not before October of this year.
They include a change of wording to the definition of estate agency activities in the Estate Agents Act. This will then exclude private sales, websites and other intermediaries from being governed by the Estate Agents Act. Alongside this is the intended repeal of The Property Misdescriptions Act (PMA) to avoid duplication of regulation and unnecessary red tape.
What does this mean for Estate Agents?
- The required information and its accuracy to be supplied to potential purchasers will, from October, be governed solely by the Consumer Protection from unfair trading Regulations (CPRs). These regulations differ from the PMA, in that they govern what should be included as well as its accuracy; the PMA only covered the latter. Compliance will be the joint responsibility of both the seller and Estate Agent and the CPRs also offer up a more robust punishment regime that can include prison in worst cases. For a full guide to the CPRs please click here – http://etsos.co.uk/consumer-protection/
- Passive intermediaries will no longer be governed by the Estate Agency Act and so no longer have to comply with its relevant guidance. This is seen by the Government as a move that will open up the sector to more innovation, new business models and so greater price competition. However as the CPRs cover all consumer transactions there is still an argument that private sellers themselves would have to ensure the correct information is provided. An example of this would be a private sale website, which itself may not need to comply as it is a passive intermediately but the private seller would.
- Although the Estate Agency Act is not to include letting agents at this point certain elements such as the Anti-Money Laundering Regulations will. For a full guide to the AML regulations please click here – http://etsos.co.uk/guide-to-anti-money-laundering-for-estate-agents/
Furthermore The Property Ombudsman has released their interim report focusing on the impact that the Consumer Protection from Unfair Trading Regulations (CPRs) are likely to have on the day to day operations of both Estate and Letting agents. The report underlines the fact that the CPRs will leave agents much more exposed to prosecution than previously by putting far more responsibility on them to supply full and accurate information. As with any new legislation the core impact will undoubtedly mean more responsibility and administration for the Agents.
For further information on the PO report please click here
Thank you to ETSOS, the country’s leading online search supermarket and property services shop, for providing us with this article. Find out more about ETSOS.