Government On Track To Implement Estate Agency Reforms This Autumn

Date Published 08 May 2013

The Government has confirmed it is to implement its amendment to the Estate Agents Act as soon as the parliamentary timetable allows.

At the same time, it will lay an order to repeal the Property Misdescriptions Act. Instead, Consumer Protection from Unfair Trading Regulations 2008 (CPRs) will apply.

Other legislation will also have to be amended because the term ‘estate agency work’ is incorporated in them. The pieces of legislation affected are the Money Laundering Regulations, Terrorism Act 2000, and the Proceeds of Crime Act 2002.

The changes are likely to go ahead this autumn. The amendment to the Estate Agents Act was part of the sprawling Enterprise and Regulatory Reform Act, which now has approval.

Confirmation of the Government’s itimetable is in a new briefing note to MPs which has been placed in the House of Commons library.

But the briefing note also acknowledges – although not in so many words – that there may have been a muddle in thinking.

The Estate Agents Act 1979 is being amended to exempt private sales portals and other `passive intermediaries` offering `low risk` to consumers from its scope. This means that private sales portals and `passive intermediaries` which merely list properties and allow people to contact each other will not have to obey the PMA.

However, the paper acknowledges that CPRs apply to all businesses. Just how much the regulations – which insist on accurate descriptions, including not leaving anything material out – will apply to private sales portals and others is unclear.

The paper says: `The CPRs apply to all businesses that deal with consumers. They could therefore be relevant where a private individual uses a private sales portal to advertise a property. The degree of due diligence that the CPRs require from such businesses is proportionate to the level of service required.`

The paper also sounds less than certain about the effect of replacing the industry-bespoke PMA with the more general CPRs.

It says: `The Government believes … that repealing the PMA 1991 would not significantly reduce levels of consumer protection.`

It refers to supporters of the move who prefer the CPRs because they include banning `misleading omissions, not covered by the PMA 1991`.

The repeal of the PMA is likely to come into force `not before` this October, says the paper.