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be a surge in alternative agents with the ability to operate outside the rules of the Act. This could potentially have an adverse impact on transparency levels, placing industry reputation, jobs and consumer protection at risk. “We strongly oppose any measure that


erodes vital consumer protection, which we believe these proposals will do,” said Mark Hayward, NAEA. “We would be disappointed to see any Government recommendations following this consultation which undermine consumer protection, and which do not take into account important issues for consumers such as including the lettings industry within the definition of the Estate Agents Act.” Robert Bartlett, CEO of Chesterton


Humberts, believes that the impact of the proposed changes could lead to an escalation in the volume of dodgy agents. He commented, “It will have a detrimental and negative effect on vendors and purchasers as these ‘passive intermediaries’ do not need to be regulated or licensed. The estate agency industry is not regulated enough and this potentially opens up the floodgates to rogue agents. The Property Ombudsman’s response to


the consultation was far more stern. Ombudsman Christopher Hamer, writing both as Ombudsman and the independent Council to which he is accountable, said that his organisation does not believe that existing businesses are burdened, pointing to the existence of approximately 14,000 estate agencies in the UK, as evidence of the ease of the entry to the industry. He wrote, “We recognise that the


Government is striving to reduce regulation and restriction on businesses but the proposed amendments do quite clearly open up opportunities for the consumer to stray unknowingly into an environment where the protection they might expect to have is not in fact available to them. “Whilst recognising that the Government


is opposed to broadening regulation, we would continue to emphasise, and this view is supported by industry and consumer stakeholders, that legislating for letting agents should be a priority and therefore that broadening the scope of the legislation is what is required rather than narrowing it.” But not everyone is against the planned changes to the Act. Russell Quirk, founder of low cost online


estate agent eMoov.co.uk, described the Estate Agents Act 179 as a “Dickensian piece of legislation that most agents have little regard for. “Whilst it sounds like a law to ban estate


agents, it’s actually a law to protect them from competition,” he added. Mr Quirk continued, “We relish competition


from all quarters as it can only serve to drive quality of service up and fees down. We therefore support the principle of any move to tear off some of the red tape within the house selling business as a positive step in providing more consumer choice amongst home sellers.”


www.thenegotiator.co.uk TPO: GERRY FITZJOHN, DIRECTOR


The council of TPO, through the Ombudsman, Christopher Hamer, and the board, through its chairman, Bill McClintock, and myself, have had robust discussions with BIS on revisions to regulations for estate agency. Far from reducing consumer protection and introducing consumer confusion BIS should be doing more to bring lettings agents within the scope of the Estate Agents Act 1979 because there are real consumer protection issues. The Board’s immediate


impression of the proposals is that consumer protection will be eroded. Whilst recognising that


the government is opposed to broadening regulation, we continue to emphasise - and this view is supported by industry and consumer stakeholders - that is it possible to cite examples or reports / surveys supporting the view that legislating


for letting agents should be a priority and therefore that broadening the scope of the legislation is what is required, rather than narrowing it. We do not believe that


‘estate agency work’ as defined in S1 of the EAA causes uncertainty about the scope of the act. There are numerous online estate agencies already trading and many of the sites provide a matching service and are members of or registered with TPO. Consumers will not draw a distinction between an estate agent and somebody that looks and feels like an estate agent but isn’t. They should not be misled into a situation where, having paid money for a service to market their property and regardless of there being distinct difference in price, different laws and differing levels of consumer protection actually apply. It is not clear whether


NAEA: MARK HAYWARD, PRESIDENT


The NAEA has argued strongly that creating a new exemption from important consumer protection legislation is definitely the wrong direction of travel. Compliance with the EAA is not a burden, and that if a new exemption is introduced it could be exploited by unscrupulous internet agents based in the UK or overseas. All consumers must


have access to an Ombudsman scheme, and probably presume that all agents are subject to some form of positive mandatory licensing by the government. This underlines the confusion that would be caused if the EAA was altered in a way that leads to one level of protection for consumers when they deal with traditional agents, but a drastically reduced level of protection when they deal with internet agents. An important issue is whether


the proposal would lead the UK government to breach its own European and international anti money laundering commitments. Our approach would be to bring lettings agents into the statutory definition, plus the possible introduction of the currently dormant parts of the EAA concerning insurance cover for client money and standards of competence. The attention that BIS


is giving to the issue of promoting internet agency is the latest development in an evolving policy landscape. Last year BIS consulted about repealing the Property Misdescriptions Act (1991). The implementation of the Consumer Protection from Unfair Trading Regulations (2008) led to the repeal of most of the Trade Descriptions Act (1968), and BIS queried whether the PMA should also be repealed.


Although there is an argument that dual presence of the PMA and the new regulations risk double jeopardy of prosecution for agents, on balance our view is that PMA should be retained. The PMA is specific to property and provides certainty; the new regulations are generic to all traders and it is unclear exactly how estate agents must comply with some of the regulations as there is no specific case law. Although the PMA’s


prescriptive approach has become unfashionable amongst legislators all the evidence suggests that it works. That here have been relatively few prosecutions of agents for breaching the PMA indicates high levels of compliance. It is a tried and tested piece of law, whereas the ‘misleading omission’ offence in the regulations is likely to remain somewhat of a grey area for agents for some time to come. l


TheNegotiator l October 2012 l 41


agents that ‘escape’ EAA obligations have any responsibilities under the Money Laundering Regulations and whether this potentially creates a risk.


TPO also thinks it is unclear what is meant by a ‘low risk’ service to buyers and sellers.


Existing agents may decide to start a new model outside the Act which would be confusing for consumers. Consumers will simply not understand the difference between an ‘EAA agent’ and the passive agent. We believe that all


property sales should be inside the Act with the exception of private sales.


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