DEPARTMENT FOR
BUSINESS, ENTERPRISE AND REGULATORY REFORM News Release (2008/134)
issued by The Government News Network on 1 July 2008
The Government is
introducing extra protection for people buying and selling homes.
Consumer Minister Gareth Thomas laid an order in Parliament today
(1 July) requiring all residential estate agents to belong to a
redress scheme by 1st October.
Gareth Thomas said:
"People who experience problems with an estate agent will
soon have access to a free, easy to use ombudsman. The scheme will
be transparent, independent and fair. It will speedily resolve
complaints and will have the power to award compensation."
New measures will also come into force in October 2008 that:
* give greater powers to the Office of Fair Trading to remove
rogue estate agents from the market
* increase the investigatory powers of enforcement officers.
Gareth Thomas said:
"Buying or selling your home is a life changing decision. It
can cause people real stress and worry. Our measures should take
some of this worry away and drive out the rogues that give honest
businesses a bad name."
Peter Bolton King, Chief Executive of the National Association of
Estate Agents said:
"We welcome and support the fact that every agent will have
to belong to a redress scheme. This will help to create a more
level playing field and to raise standards to the benefit of
consumers and honest businesses. We see this as an important step
- after all buying a home is one of the biggest financial and
emotional decisions we ever make."
Pula Houghton, Campaigns Policy Manager at Which? said:
"We've been campaigning for a compulsory complaints
scheme for estate agents for the last five years, so we're
delighted that the scheme is nearing fruition. We're looking
for this to make a genuine difference to those people who suffer
at the hands of shoddy estate agents."
Estate Agents who want more information on the redress
requirements should contact the OFT or visit their website http://www.oft.gov.uk.
Notes to editors:
1. Research commissioned by the OFT in 2004 showed that 21% of
sellers and 23% of buyers experience problems with estate agents.
2. The Estate Agents Act 1979 (EAA 79) as amended by the
Consumers, Estate Agents and Redress Act 2007 (CEARA 07), enables
the Secretary of State by Order, to require estate agents who
engage in residential estate agency work to join an approved
redress scheme dealing with complaints from buyers and sellers of
residential property. Responsibility for approving one or more
redress schemes lies with the Office of Fair Trading.
3. On 19 June the OFT approved an application from the Ombudsman
for Estate Agents to run a redress scheme. The OFT is currently
considering two other applications. Details of these applications
are available on the OFT web-site.
4. Estate agents in England and Wales that market properties with
Home Information Packs (HIPs) are already required to belong to
approved redress schemes solely for the purposes of complaints
about estate agents in relation to HIPs. This order goes further
by covering all estate agents in the UK and all complaints about
the buying and selling of residential property. It fulfils a long
standing Government commitment to give all sellers and buyers
(including potential sellers and buyers) of residential property
access to independent redress.
5. In the first instance there will be a penalty charge of £1,000
for estate agents that don't comply with the requirement to
join a redress scheme. The penalty charge is in addition to the
ultimate sanction for non-membership - a prohibition order banning
an estate agent from carrying out estate agency work.
6. The Government's estate agents measures were part of the
Consumer, Estate Agents and Redress Act that received Royal Assent
in July 2007.
7. The Department for Business Enterprise and Regulatory Reform
helps UK business succeed in an increasingly competitive world.
It promotes business growth and a strong enterprise economy, leads
the better regulation agenda and champions free and fair markets.
It is the shareholder in a number of Government-owned assets and
it works to secure, clean and competitively priced energy supplies