TheBusiness
Legislation Proposal to amend Estate Agents Act 1979 is slammed by industry, writes Marc Da Silva.
order to help boost economic growth, has been slammed by the property industry. The Department for Business Innovation
T
& Skills (BIS) issued a consultation in June entitled Encouraging New Business Models - Proposal to amend the Estate Agents Act 1979, asking various property professionals for their views on the proposal to amend this legislation. The BIS seemingly wants to exempt “passive intermediaries offering a limited, low-risk service”, to homebuyers and vendors from being regulated by the Act. What this effectively means is that passive
enterprises, particularly SMEs, providing a communication platform for the exchange of information about properties for sale between vendors and purchasers, may be excused from certain laws in the Act.
The aim is to help businesses to innovate
and grow and allow new business models to emerge while ensuring that consumer protection is not unduly compromised. However the fear is that if the proposed amends to the Act are approved, there may
40 l October 2012 l TheNegotiator
he Government’s proposal to amend the Estate Agents Act, as part of its bid to reduce the regulatory burdens on business in
RICS: PETER BOLTON KING, GLOBAL RESIDENTIAL DIRECTOR
The proposed amendments suggest that ‘passive intermediaries’ such as online portals, which offer a limited, low-risk service to buyers and sellers, should not be subject to the Estate Agents Act 1979. The aim is to help business innovation and growth and allow new business models to emerge without detriment to consumer protection. RICS was invited to respond to these proposals.
Our balanced, yet robust, response was submitted to BIS following input from the RICS Real Estate Agency Group, consisting of members from both small and large firms. Whilst we acknowledge that it is necessary to change the legislation, which is out of date since the advent of the internet, we are concerned about the way Government are going about this and have expressed these concerns in our response. Our main concern centres on potential consumer detriment if the term ‘passive intermediaries’ is not clearly defined. This leaves it open to interpretation and could result in a growth of unregulated agents
operating outside the Estate Agents Act, with no requirement to provide redress agreements. We have therefore encouraged the Government to clarify the activities that would be exempt from the legislation. This would prove clearer than tightening the definition of ‘estate agency work’ which could result in certain high risk activities being taken out of the scope unintentionally. We also continue our call for the Estate Agents Act of 1979 to be extended to all lettings agents. This will ensure a single regulatory framework for the industry, subject to a clear redress system, helping to prevent consumer harm and create clarity for businesses.
www.thenegotiator.co.uk
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