Office of Fair Trading
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Join a redress scheme by 1 October, OFT reminds Estate Agents
The OFT has today reminded residential estate agents that, from October, they must be members of an approved redress scheme.
New requirements introduced by the Consumers, Estate Agents and Redress Act 2007 mean that all persons who engage in estate agency work in relation to residential properties in the UK must join a redress scheme with effect from 1 October 2008.
Actual and potential buyers and sellers of residential property with complaints about estate agency work will then be able to use a free, easily accessible, fair estate agents redress scheme, which will have the power to make a range of awards, including requiring a member to pay compensation. The OFT has to date approved two schemes, operated by the Ombudsman for Estate Agents Company Limited and the Surveyors Ombudsman Service. Details of these are available on the OFT's website. Residential estate agents who are not already a member of an approved scheme should act now to ensure that they are members of such a scheme from 1 October.
If an estate agent is not a member of a scheme, Trading Standard Officers have the power to impose a penalty charge notice for failure to comply with the new requirement. The OFT may consider enforcement action which could include making a prohibition order banning the agent from practicing as an estate agent in the future.
Mike Haley, OFT Director of Consumer Protection, said:
'It is important that agents are aware of their obligations and the possible consequences if they fail to comply from 1 October 2008. Agents who fall short could be fined and risk a ban from estate agency work in future.' The OFT has previously provided guidance on which activities fall within the definition of estate agency work (see press release - 228/05, http://www.oft.gov.uk/news/press/2005/228-05).
NOTES
1. The Consumers, Estate Agents and Redress Act 2007 (CEARA) amended the Estate Agents Act 1979 (EAA) to allow the Secretary of State to require (by means of a redress scheme Order) those engaged in estate agency work in relation to residential property to be members of an approved redress scheme ('estate agency work' and 'residential property' are defined by the EAA as amended by CEARA). Under the CEARA the redress schemes need to be approved by the OFT. The CEARA is available on the UK Statute Law Database.
2. CEARA introduces other changes to the Estate Agents Act which will also come in to force on 1 October 2008. These amendments give the OFT and Trading Standards Officers wider powers to inspect an estate agent's files on a transaction and give the OFT more scope to consider an estate agents fitness to practice. Full details of these will be available on the OFT's website.
3. The Secretary of State made a redress scheme Order on 1 July 2008. It will come in to force on 1 October 2008. Details are available on the UK Statute Law Database.
4. The OFT published criteria for approval of a redress scheme in October 2007. An amendment to one of the criteria was issued in March 2008.
5. There are now two approved estate agents redress schemes. In June 2008 the OFT approved the Ombudsman for Estate Agents Company Limited's estate agents redress scheme - see PN 75/08 and in August approved the Surveyors Ombudsman Service estate agents redress scheme - see PN 96/08.
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