Estate agents 'will need to choose words carefully'.
The Office of Fair Trading announced in October that there will be a repeal of the Property Misdescriptions Act as the Consumer Protection Regulations aim to develop and extend an estate agent's duty of care to consumers as well as selling clients.
The Property Misdescriptions Act 1991 makes it an offence to make false or misleading statements in the course of estate agency business when advertising property for sale.
Following a consultation process the Government announced that the Act will be repealed. Instead, the CPRs will be relied on to protect both property sellers and buyers.
This decision will replace the custom legislation that deals with the needs of one market with an all-encompassing law not designed specifically for property sales.
The CPRs are potentially more powerful than the Property Misdescriptions Act and the regulations will now include a ban on misleading omissions, which are not currently controlled.
One North East property agent explained that the first reaction to the repeal by estate agents was one of dismay.
Samuel Gibson of Strutt and Parker said: "The Act is not perfect, but importantly it is there to regulate property marketing and sales to purchasers on specifically prescribed matters, which makes the estate agent's life easier.
"It is also supported by a body of case law which legal professionals can use to advise their clients with precision. Conversely, the CPR is relatively new legislation and provides a more general protection which will be extended to property.
"It is standardised and covers a much broader area than the Property Misdescriptions Act. " Mr Gibson added: "This means that estate agents will have to consider not just what they do say about a property, but also what they don't say.
"They must ensure that any applicable truths or particulars are actively made available to potential buyers. In the short term it may be difficult for sellers to accept that we are required by law to mention any issues which are likely to affect a potential buyer's decision on making an offer or not.
"But the advantage is that this added transparency means that buyers will be fully aware of any shortcomings around a property well in advance of making an offer, which in turn should ensure that fewer deals collapse once in solicitors' hands."
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|Publication:||The Journal (Newcastle, England)|
|Date:||Feb 9, 2013|
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