What are Estate Agent’s Legal Obligations to Buyers?
Estimated reading time 8 minutes
Buying a property can be a stressful and time-consuming event. Luckily, you have your estate agent on hand to help make things run smoother for you right? Well, not always. Some estate agents are unfortunately all about the commission rather than the customer service. As long as they get that sale completed, they don’t mind what happens after. Times are changing though, and legislation is cutting down on such activity meaning that estate agents must be much more transparent and treat those buying a house fairly, divulging more information on the property than they may have done in the past.
So, in this edition of our blog, we look at the things estate agents must share with you to stay on the right side of the law and provide potential buyers with information they have every right to know.
What does the law state that estate agents must disclose?
To ensure they do not fall foul of the law, estate agents must make sure that they disclose information described as fair to both buyers and sellers. That includes making any material information about the property, clear, not deliberately misleading, vague, or withheld from buyers.
The legal obligations of estate agents and others to the buyers
Under the rules set by the Consumer Protection Unfair Trading Regulations of 2008, estate agents must make sure that specific rules are adhered to. This law though, extends to more than just estate agents. Developers and websites that try and introduce buyers and sellers to each other can also be held accountable for unfair practices. If any were found to be acting in this way, they could face unlimited fines and potentially face prison.
In addition to legal obligations, certain estate agents must also adhere to the Code of Practice for residential Estate Agents.
Should the property being brought be a leasehold, there is even more that estate agents must do to remain fully compliant.
The legal obligations of estate agents to buyers of leasehold properties
With the difference between leasehold and freehold meaning properties may fall under different rules, estate agents have to make sure they are fully aware of the type of property being sold. When it comes to leasehold, not only should council tax, tenure, and the price be fully disclosed by estate agents, but they must also inform prospective buyers of:
- Service charges
- Ground rents
- Remaining time on the lease
- Any special conditions
- Any additional fees that could be incurred
The 4 obligations of estate agents to buyers
To make sure the law is followed. There are four key obligations estate agents must follow to ensure transparency and honesty are given to any potential buyers. Failing to do so could not only see the property transaction collapse but could see the estate agent in trouble.
To give an accurate description of the property
Estate agents must, as covered in the Consumers Protection from Unfair Trading Regulations 2008, disclose any information that they are aware of in relation to the property in a clear, understandable, and timely fashion.
Descriptions must be accurate without any misleading wording, and they shouldn’t be composed in a way that can make buyers confused about the property. A description that could be interpreted as one thing but means something else simply isn’t allowed. For example, if a property has recently had some new white goods installed that will stay in the property when it is sold, the kitchen could not be described as a “fully renovated kitchen”. Likewise, a property that backs onto a busy dual carriageway could not be listed as on a quiet street, even if the house itself is on a quiet street as the property will still get lots of noise and therefore the advert would be misleading.
Photos are a fantastic tool to help sell property and they often speak to you more than the words on the listing. An estate agent cannot provide photos though that could present the house in an untrue light. Hiding flaws or features that could deter buyers is not allowed. In addition, clever use of editing tools to make the property look bigger or different from its true likeness is forbidden too.
When it comes to viewing or appointments, the estate agent is not allowed to say anything verbally, as well as in online communications that could mislead the interested parties or describe the property inaccurately to them.
Our advice is that estate agents have rules to follow but will be happy to find a way to just about stay in line with them. If something sounds vague, or you are just unsure, ask them for more clarity.
To ensure all important information is relayed to the buyer
The same act that states estate agents must not mislead any buyers also states that they must also disclose all material information.
This means that there should be no information omitted that could impact the decision made by a potential buyer.
Information relating to whether sales for this property have recently collapsed must be passed on to the interested parties as should any details about whether there are planned developments in the area. Regarding the local area, the estate agent should also inform the buyers about it in as much detail as possible. Information such as whether there are schools, nightclubs, or areas that have high levels of traffic must all be shared with interested parties. Noise can be a huge deterrent in property purchases so the estate agent must be honest.
The buyer should also be notified of crime in the area, and it is part of the estate agent’s legal obligation to inform them whether the property has had a murder or suicide occur inside it.
If the neighbourhood has a high crime rate or a recent spate of burglaries, this should also be passed on to the buyer as should whether there are any special conditions imposed on any neighbours such as ASBOs.
Information relating to the property itself must also be given promptly. If there is any structural damage, for example, an estate agent must disclose this immediately, regardless of whether the buyer is booking in a survey themselves. This disclosure should also cover signs of damp, any leaks, or electrical faults. It must also cover the potential for these problems too should there be signs that they may develop.
All this information must be provided at the earliest opportunity and would contravene the regulations if it was disclosed when it would be too late for the buyer to be able to pull out.
To pass on all offers to the seller
Estate agents have a legal obligation to pass on all offers made on the property to the seller, regardless of what the offer is. All offers, right up until when the sale is agreed must be passed on and done so as soon as possible after the offer has been made.
News of these offers must be communicated in writing, whether that be by letter, email, or fax.
The only time an estate agent does not have to pass on any offer is if the seller has requested that offers of a certain value be instantly rejected.
To remain impartial towards all interested parties
An estate agent is legally required to show no bias towards any buyers. Each buyer must be given the same information and the same opportunities to make an offer, view, or ask questions about the property.
The estate agent must not allow one buyer to have an unfair advantage over another and conditions of sale must remain the same for all involved.
The estate agent must also, by law, declare whether they are connected to anybody involved in the process, regardless of whether it be the seller or a buyer.
Can you complain if your estate agent has acted improperly?
If you are going through the process of buying a house and have found that your estate agent has not followed any of the above rules, you should raise your grievance at the earliest opportunity. Hopefully, they will resolve things quickly but, in many cases, it may be too late. Especially if offers are coming in for the property and being accepted.
The reasons for you approaching them could vary but if you feel that you have missed out on vital information or been put under undue pressure by them to accelerate the process, complain! If nothing comes of it, you should reach out to The Property Ombudsman, a successful claim through them could see you rewarded as much as £25,000 although payouts never tend to be that high with the claims normally resulting in as little as £350 compensation.
For the most part, estate agents will act with your best interests at heart. In doing so they have more chance of securing a sale and getting you the home you want. However, some may not always follow the rules. If you are looking to sell and want to avoid the potential issues you could face with an estate agent, speak to Gaffsy. We can sell your house fast and remove the delays, chain breaks, and complications associated with selling via traditional methods. As a cash house buyer, we can have a free cash offer with you quickly and then have funds in your account within as little as seven days.