Estate Agency Flashcards
Are you aware of any pending changes to the RICS standards relating to agency?
Following approval of the RICS Property Agency and Management Standards Strategy by the RICS Standards and Regulation Board in 2023, the RICS is working on reviewing and refreshing the existing body of standards and guidance relating to property sales, lettings auctions and property management.
Are you aware of any RICS statements on Agency?
RICS Professional Statement: UK Commercial Real Estate (2016)
- Sets out 12 core principles which agents must observe, including:
-Acting honestly, fairly, transparently and professionally
- Doing the utmost to avoid conflicts of interest
- Ensuring terms of business are clear and fair
-Holding client money separately
To what does the 1979 Estate Agents Act apply?
-Disposal or acquisition of a freehold or leasehold interest in property or land with a capital value
What are the two key sections of the 1979 Estate Agents Act with regards to the purchase and sale of property?
- Section 18: clarity as to the terms of the agency
E.g. the circumstances in which the client will become liable to pay fees to the agency and the fee basis; any additional fees that could be incurred by the client throughout the agency process (e.g. marketing brochures, marketing boards etc.). Must also specify nature of agency
-Section 21: Personal Interests
Agents must disclose any personal interest in the property/disposal/acquisition
Which body polices the 1979 Estate Agents Act?
The National Trading Standards Estate & Letting Agency Team (NTSEAT)
What are the potential penalties for breaching the 1979 Estate Agents Act ?
- Prohibition or warning order
- Costs can also be awarded
What is a cooling off period?
It is a period of up to 14 days in which a client is allowed to change their mind about instructing an agent without incurring any penalty
What information must be given to clients under the Estate Agents (Provision of Information) regulations 1991?
- The scope of services
- Remuneration
What are CPRs?
Consumer Protection Regulations - relevant regs. are the Consumer Protection from Unfair Trading Regulations, 2008
To what do CPRs relate?
Business-to-consumer activities
Explain your understanding of CPRs
They were implemented to protect consumers from unfair business-to-consumer commercial activities, including giving false or misleading information, hiding or failing to provide information, omissions, exerting undue pressure on consumers and failing to show professional diligence.
Who polices the CPRs and what are the potential fines?
Trading Commissioner’s Office
- Unlimited fine and/or prohibition order
- Compensation may also be paid to a defendant up to £25,000
In an agency context, to what type of work do CPRs apply?
All lettings and sales of property
Under the CPRs, what are some of the key obligations incumbent on agents?
- Declare everything known about the property - i.e. do not make any omissions
- Do not exert undue pressure on potential buyers
- Undertake full due diligence
To what do BPRs refer?
Business Protection from Misleading Marketing Regulations, 2008
- They prohibit misleading b2b advertising, particularly in relation to the way in which products are compared to the products of other companies
What is meant by ‘caveat emptor’
-Literally means ‘let the buyer beware’
-It is a common law principle that it is incumbent on the purchaser to satisfy itself on all matters relating to the property
How does the Consumer Rights Act 2015 apply to estate agency?
- It is a consolidation of the law relating to unfair business-to-consumer practices
- In an agency context, it is incumbent on letting agents to clearly display a summary of their fees both in their office and on their website
Which body polices the 2015 Consumer Rights Act and what are the fines for breaches?
the relevant Local Authority
- fine of up to £5,000 for each breach
What is the key principle of the Misrepresentation Act 1967?
- It relates to a misrepresentation or a false statement of fact made during pre-contractual enquiries, which has the effect of inducing a party to purchase
What are the potential outcomes of breaches of the Misrep. Act 67?
The vendor and or agent can be sued for damages
- The contract may be rescinded
What are the three types of misrepresentation under the Misrep. Act 67?
Negligent, fraudulent and innocent
What are the three tests to decide an agent’s liability for negligent statements under the Misrep. Act 67?
-Foreseeability
- Proximity
- Fairness
What is the key case related to the Misrep Act and what was its relevance?
Hedley Byrne & Co. v Heller & Partners (64)
- It found that Heller & Partners did owe a duty of care to Hedley Byrne & Co, however their liability was limited because they caveated their advice with a disclaimer.
I.e. the case confirmed the principle of negligent misstatement but also underscored the importance of disclaimers in limiting liability.
Do you refer to any legislation when displaying marketing signage?
The Town & Country Planning (Control of Advertisements) Regulations 2007
