The Custodian Insurance Industry Blog

May 19, 2014

Example cases

We have some early indications on how the CPRs are being interpreted.

EXAMPLE 1

Last year the Property Ombudsman ruled against a number of letting agents in cases of misleading omissions and actions. One such case involved tenants who were only informed of their landlord’s intention to use a shed in the garden as his studio after they had already signed the tenancy agreement. The tenants had not yet moved in and were unhappy with this revelation; as a result they withdrew from the tenancy and had to find alternative accommodation at short notice.

The Ombudsman found that the agent had always been aware of the landlord’s intentions and had failed to clearly communicate this material information to the tenants and was therefore in breach of the CPRs.

 
EXAMPLE 2

The issue of disclosure is extremely subjective. It’s early days – the legislation is open to interpretation and needs further testing in court. Estate agents Beresford Adams was taken to court for failing to disclose the presence of a mineshaft which had already put other prospective buyers off. They were ordered to pay a £3,500 fine, £5,000 costs and to pay the complainant compensation of £515. This covered the cost of searches and surveys incurred which would never have been commissioned, had the information about the mineshaft been disclosed.

This case was eventually thrown out on a technicality but it offers some insight on how the CPRs may be applied in the future and highlights the costs of defending an action bought under the CPRs.

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