House builders, their site sales staff and estate agents must comply with the Consumer Protection from Unfair Trading Regulations 2008 and the Business Protection from Misleading Marketing Regulations 2008
The Office of fair trading (OFT) has published guidance for estate agents, house builder and others involved in property sales understand their responsibilities under consumer and business protection regulations 2008. They have also published two short consumer advice sheets as a guide to help those buying or selling residential property.
The scope covers all property selling businesses, estate agents, property developers and intermediate websites that facilitate contact between buyers and sellers.
This guidance identifies examples of trading practices that could breach the regulations and includes practical steps that property sales businesses can take to comply with the law by:
- Ensuring that all information provided, whether in writing, in pictures or verbal, is accurate when advertising for new business or when marketing property. Breaches of the regulations might include falsely claiming to be a member of a professional body, misdescribing a property for sale or making unfair comparisons with competitors.
- Not leaving out important information that consumers need to make informed decisions. Throughout the buying and selling process, businesses must provide the necessary information to enable informed choices to be made on viewing a property, making an offer or instructing solicitors and surveyors.
- Not putting pressure on consumers to act quickly to put in an offer, raise their price, skip the survey or exchange contracts.
- Having an effective customer complaints procedure that is understood and followed by all staff who come into contact with the public.
The guidance specifically covers two pieces of existing legislation: Consumer Protection from Unfair Trading Regulations 2008 (CPRs) and the Business Protection from Misleading Marketing Regulations 2008 (BPRs). A business is carrying out a "misleading action" if information it gives "in anyway deceives or is likely to deceive the average consumer"
Non-compliance of these regulations could lead to enforcement action under the Enterprise Act 2002. This could see a trader give undertakings, or be subject to civil court proceedings to stop breaching the regulations. Non-compliance can also result in criminal enforcement action. The regulations allow for fines up to £5,000 in a magistrates' court, or an unlimited fine and up to two years' imprisonment for a conviction in the Crown Court (or Sheriff Court in Scotland).
The new guidance will assist estate agents house builders and those that advise consumers and enforce the regulations. The government has announced an intention to repeal the Property Misdescriptions Act 1991, which has largely been superseded by the Consumer Protection from Unfair Trading Regulations 2008 and the Business Protection from Misleading Marketing Regulations 2008.
Property Misdescriptions Act 1991 made it a criminal offence to make false or misleading statements either verbal, written or by pictures. Individuals as well as companies can be fined for each breach of these regulations. It is prudent to take notes listing all relevant points and answers to your questions and ask the sales person to sign to signify that what they have said is true.
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