TYNEMOUTH ESTATE AGENTS GIVE UNDERTAKINGS TO THE OFT

11 Apr 2006 11:15 AM

Two Tynemouth estate agents have been required to change their conduct and be more transparent in their dealings with consumers, following action by the OFT.

Gordon Reed and Jason Roberts, director and former director of Coast and Country Estate Management Limited, trading as Roberts & Reed, 39 Front Street, Tynemouth, have given undertakings to the OFT that they will comply with the provisions of the Estate Agents Act 1979 and related subordinate legislation, including the Estate Agents (Provision of Information) Regulations 1991 and the Estate Agents (Undesirable Practices) (No.2) Order 1991. An investigation by the OFT into a consumer complaint indicated that Roberts & Reed had breached provisions of the above legislation but they have both given a commitment to the OFT that in future they will:
* provide all prospective clients with written details of their charges and fees before they are committed to any liability towards them
* not make any misrepresentations as to the existence or status of any prospective purchasers; and
* pass on all offers promptly and in writing

Both Mr Reed and Mr Roberts have fully co-operated with the OFT. Christine Wade, OFT Director of Consumer Regulation Enforcement said:

'Buying a house is both expensive and stressful for consumers. Estate agents must be transparent in their dealings with clients, pass on all offers received and must not make misleading comments about prospective purchasers. Due to the Enterprise Act there is now an expanded range of tools that can be used by the OFT to protect consumers.'

If an agent breaches undertakings given to the OFT, the OFT may seek an Enforcement Order from the court. If the agent then breaches the Enforcement Order, this would amount to contempt and could be punished by a fine and/or imprisonment.

Alternatively, if either Mr Reed or Mr Roberts were found to have committed the same or similar breaches again, the OFT could also consider banning them from estate agency work.

NOTES

1. The OFT obtained an undertaking from Mr Reed on 2 February 2006 and from Mr Roberts on 9 February 2006.

2. The Enterprise Act, which came into force on 20 June 2003, improves consumer protection by giving enforcers strengthened powers to obtain court orders or undertakings against traders that breach a range of consumer legislation; controlling activities such as misleading advertising, misleading price indications, lotteries, sale of goods and services, underage sales, estate agency, misleading health claims, trade descriptions, mock auctions, timeshare, unfair terms in consumer contracts, doorstop selling, distance selling, package travel and consumer credit.

3. The Estate Agents Act 1979 and related subordinate legislation covers anyone who, in the course of business, is engaged in "estate agency work".

4. Under section 18 of the Estate Agents Act, an estate agent must, before entering into any contract for estate agency services, give his client particulars of the circumstances in which the client will become liable to pay remuneration, and particulars of the amount of the agent's remuneration for carrying out estate agency work; or if this is not possible, details of the way in which it will be calculated.

5. The Estate Agents (Provision of Information) Regulations 1991 ("the Regulations") clarify and extend these obligations and explain certain terms. If any of the terms "sole agency", "sole selling rights" or "ready, willing and able purchaser" are used by an estate agent in the course of carrying out estate agency work, he shall explain the intention and effect of those terms to his client by means of a written explanation having the form and content of the statements set out in the Schedule to the Regulations. The statutory explanations must be used in the form set out in the Regulations unless this would be misleading because of the other provisions of the contract.

6. Under the Estate Agents (Undesirable Practices) (No.2) Order 1991 (paragraph 1(b) of Schedule 3), an estate agent must not misrepresent the existence or status of any prospective purchaser of an interest in the land.

7. Under the Estate Agents (Undesirable Practices) (No.2) Order 1991(paragraph 2 of Schedule 3), an estate agent is required to pass on to his client promptly and in writing accurate details (other than those his client has indicated in writing that he does not wish to receive) of any offer he has received from a prospective purchaser in respect of an interest in the land.

8. Consumers choosing an estate agent can now look for the OFT approved logo. In September 2005, the Ombudsman for Estate Agents Company Limited (OEA) secured OFT approval for its consumer code of practice. The OFT only approves codes that are effective in safeguarding and promoting consumer interests beyond the basic requirements of the law. Members of the OEA can now use the OFT approved code logo to display their commitment to high quality customer service standards.

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