OMBUDSMAN
Freehold? Leasehold? Be accurate about tenure, says Christopher Hamer, The Property Ombudsman.
actions of the estate agent. The majority of arise from miscommunication and misunderstanding and I therefore seek to highlight a few important points. One issue that repeatedly occurs
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concerns the alleged failure of the agent to accurately describe the tenure of the property, which is of particular concern to potential buyers who either do not want to purchase a leasehold property, or would only consider this if they were buying a long lease. In one recent case, the Complainant,
who was a buyer, raised complaints concerning the Agent’s sales particulars and the (now defunct) HIP. The property was leasehold and the Complainant claimed that the HIP was defective in that it did not contain a copy of the lease and that the Agent failed to provide her with a copy of the lease despite being asked. I determined that the HIP should have
contained a copy of the lease and, despite the Agent stating that both they and their HIP Provider had chased the seller for this, there was no evidence of any attempt to progress this matter on the Agent’s file. I supported the complaint made in this regard. The Complainant also complained that the sales particulars stated that there would be a 125 year lease. The Agent stated that the Seller had
told them he was negotiating a new 125 year lease and relied on this information as accurate. However, I determined that the sales particulars should have reflected the actual situation which was a lease for 99 years, effective from 2005. I supported the complaints raised in this regard and made an award of £200.
Agents have to equip both parties to make informed decisions.
I do not necessarily expect an agent to
establish the title to the property; that is a matter for the parties’ respective legal representatives once a sale has been agreed. I recognise that an agent is dependent to an extent on information provided by the seller. However, I do expect an agent to be alerted to likely anomalies, for example a flat is unlikely to be freehold property, whatever the seller may state, and I would expect further questions to be asked to clarify the situation. Specifically, in the above case, it was not
acceptable for the Agent to include incorrect tenure details in their sales particulars based on what the seller might have been able to negotiate in the future. When coming to any decision, I do
s Ombudsman I receive numerous complaints from buyers who perceive that they have been disadvantaged by the
acknowledge that consumers have a responsibility to equip themselves properly. However, agents have a responsibility to ensure that consumers are appropriately aware in order to allow them to make a fully informed decision. The suitability of a property for their needs is a matter for the consumer, in conjunction with their legal and professional advisers, to determine. An agent’s responsibilities regarding the property are largely laid down in the Property Misdescriptions Act 1991 and the Consumer Protection from Unfair Trading Regulations 2008. While most agents accept that they must not mislead a consumer, it is not helpful to omit relevant and necessary information which quite reasonably will be requested later in the transaction. A buyer’s lack of awareness, which may
turn out to be a deal breaker at a subsequent stage in the transaction, and can be caused by an agent’s failures to properly inform, and perhaps also by sellers who do not provide full and accurate information, is a common cause of complaint to my office. For me to resolve the matter fairly, I will be relying partly on the agent’s records, which is the first thing my case officer will want to see. All registered firms need to be able to show, through relevant supporting documentation, that they equipped both parties to make the informed decisions that were necessary in the sales process. I do not consider that the principle of caveat emptor should be used as a device for complete abdication of responsibility; an agent should be aware of their responsibility to provide full and accurate information.
Do you have any views to share?
www.propertydrum.com/articles/ombudsman1211
PROPERTYdrum DECEMBER 2011 43
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