LEGAL
Brief encounter
Need a lawyer? Make sure you pick the right type, says Andrea Kirkby.
S
ay ‘legal services’ to most estate agents and they immediately think of conveyancing or tenancy agreements. But there’s a huge amount of law affecting the property business – and,
particularly when things go wrong, agents may need more advanced legal assistance. Some types of liability are quite
unexpected. For instance Giles Insurance reports settling a case where an estate agent let a potential buyer have keys to a property without carrying out the relevant checks; the ‘buyer’ turned out to be a con man who stole the contents of the house. So although most agents know a reliable
solicitor who can handle their conveyancing or lettings, when things go wrong they may have a problem. “I think many tend to panic,” says Marveen Smith of PainSmith solicitors. The panic is made worse by the fact the
there are a number of different areas of law involved. Roger Smith, a consultant to solicitors Barlow Robbins, among other clients, explains. “First you have to look at the professional standards required, for instance the Estate Agents Act and Property Misdescriptions Act. Then you have a second tranche of legislation and regulations which specify what has be done and when, for instance when you’re issuing notice to tenants; I’m afraid there are some agents out there who are still very cavalier about these aspects. And beyond the legal requirements you have all the documentation and rules that have to be complied with, such as Land Registry plans.” Then besides the specific legal
requirements of the industry there are implications in contract law. In addition, agents may well come across all kinds of property disputes – Eamonn Hogan at Access Legal from Shoosmiths says that the most common disputes he sees are those between neighbours, probate disputes, and disputes over rights of way; though agents are unlikely to be party to such proceedings, they may well be involved in property sales which are complicated by them.
24 NOVEMBER 2011 PROPERTYdrum Nick Perkins, Partner at Dean Wilson
Solicitors, says one dispute that he sees fairly often is where a client has sold privately, and the agent believes he is entitled to commission. “If the agents are still the effective cause of the sale, even if that’s just by putting a board up, they are entitled to their commission,” he says. But each case is decided on its merits, and will also depend on the exact terms of the contract between agent and client.
The ProPerTy MisdescriPTions AcT One piece of legislation that directly affects agents is the Property Misdescriptions Act. It seems to be a fairly simple piece of legislation, but there are a number of legal features that many agents don’t appreciate.
need for the courts to prove that there was any intention to mislead – and the Act holds both the employee personally and the firm as whole liable. While the fine could (if a case goes to the
Crown court) be unlimited, most cases are heard in magistrates’ courts and involve a fine of up to £5,000. Cases are relatively rare – Nick Perkins, says there were a large number of prosecutions shortly after the act was brought in, and “they still do prosecute from time to time, but not so often, as agents have got better at cleaning up their act.” Eamonn Hogan says agents are further
Do you know the difference between a misdescription and a misinterpretation?
While there is no general requirement to disclose information, whatever information is provided must be accurate, Eamonn Hogan says; it’s a criminal offence to give false information. He warns that the Act includes oral statements as well as written particulars, so an agent who hints to the client on a property visit that ‘planning permission won’t be a problem’ or ‘that’s not really damp’ could well be breaking the law. Agents have strict liability – there’s no
protected by the fact that statements have to be false “to a material degree”; a measurement that is out by two millimetres won’t get an agent into trouble. “The courts will look at the standards within the profession,” he says, “and they are quite pragmatic.” He also points out that the
misdescription (a criminal offence) is different from misrepresentation, a civil matter – though the same property could get an agent into trouble for both. (Suits for misrepresentation, though, are more often brought against the seller rather than the agent – for instance in a case that he handled where a house in fact didn’t have planning permission for a roof terrace, and
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