If CPR means nothing to you..you better read on…
On 1 October 2013, the Property Misdescriptions Act 1991 was repealed and replaced by The Consumer Protection from Unfair Trading Regulations 2008 (CPRs). So what you might say?
Well, this has wide-ranging implications for all estate agents and lettings agents.
The act appears to expand an agents’ responsibility to disclose ‘material
information’ to potential buyers and tenants. This exposes agents
vulnerable to a range of accusations and possible conflicts with their clients.
The issue of disclosure is extremely subjective. It’s early days – the legislation is open to interpretation and needs further testing in court. There has been one case that has been tested in the courts (Beresford Adams). This case was eventually thrown out, but it is likely that considerable costs would have accrued in defending the agent.
Some very basic guidelines for agents include the following:
- Be aware that the new CPRs will go beyond the repealed Property Misdescriptions Act
- Avoid misleading actions/ommissions which could cause an ‘average consumer’ to take a transactional decision he otherwise would not have made if he had full disclosure
- Consider how far a consumer may be travelling when he/she calls to view a property. The further they are travelling, arguably the more that needs to be disclosed
- Ensure you have professional indemnity insurance in place
Custodian Insurance has launched a Professional Indemnity Insurance (PII) product that will defend innocent breaches of the new CPRs, and will provide at least some security in a time of considerable uncertainty.
Making a judgment on how and when to disclose information is not clear cut at this stage. But one thing does seem clear: “buyer beware” has shifted toward “agent beware”. Only time will tell by how much!
Call 0207648 4343 or info@custodianinsurance.co.uk for more information.
