In the wake of today’s story concerning agents who leave SSTC properties showing as available on portals etc, this afternoon an opinion blog written by expert property lawyer, David Smith of JMW, may cause some agencies a sleepless night or two.
Because in Smith’s view a criminal offence may be involved.
He writes:
Recently there have been reports of agents leaving properties live on portals even though they are “sold subject to contract”… It is almost certainly a criminal offence.
The Consumer Protection from Unfair Trading Regulations 2008 (the “CPRs”) regulates estate and letting agents, just as much as other businesses trading to consumers. In fact it is likely to be an offence under several different parts of the regulations.
First, it is important to realise that the CPRs restrict any practice which might lead to a consumer making a transactional decision. That includes merely deciding to call an agent to book a viewing. So it is no defence here to say that as soon as someone calls the agent they will find out that the property is no longer available and will have lost nothing. The effort by the consumer in calling to have their time wasted is enough to justify a prosecution. In fact, agents know this very well and they certainly do not allow a call to end with the simple assertion that the property is no longer available without also trying to make clear that there are other properties an enquirer is interested in.
Looking at the regulations we can see that regulation 8 makes clear that it is an offence to engage in a commercial practice “which contravenes the requirements of professional diligence” and which is “likely to materially distort the economic behaviour of the average consumer”. As I set out above this practice is entirely intended to distort the behaviour of a consumer and its description by industry figures as “sharp practice” makes clear that it is unlikely to be considered to be professionally diligent.
Regulation 9 makes misleading actions an offence. These are defined in regulation 5 and include any advert which “contains false information and is therefore untruthful” in relation to a range of matters. One of these matters is specifically described as being the “availability of the product”. Clearly, suggesting in an advert a property is available to view and purchase when it is in fact not is likely to be a misleading action.
Finally, regulation 12 makes it an offence to engage in any commercial practice described specifically in Schedule 1 of the CPRs. These actions are always considered unfair and were set out in the original EU Directive which gave rise to the CPRs. One of them states:
6. Making an invitation to purchase products at a specified price and then—
(a) refusing to show the advertised item to consumers,
(b) refusing to take orders for it or deliver it within a reasonable time, or
(c) demonstrating a defective sample of it,
with the intention of promoting a different product (bait and switch).
Advertising a property as being available but then telling callers that they cannot view it because it is SSTC is a classic example of bait and switch.
I hope that this is not something that is happening. The CPRs are created for a reason and are abused by some of the very worst traders in the property sector and the marketplace generally. This is the nicer end of the some of the appalling scams perpetrated during lockdown where tenants were told they had to pay holding deposits before viewing properties which turned out to be total fakes.
They are legally-speaking on the same continuum and, morally-speaking, not so very far removed either.
More on this story in tomorrow’s Property Industry Eye.
Someone needs to take a ‘chill pill’ here.
The original story did not allow for comment as was a poll.
It stated that some buyers are calling agents and being told that the property “has JUST gone under offer” so is not available to view.
That property may still be showing as ‘For Sale’ – WHY?
Because having received a possible acceptable offer, there is due diligence to take place – proof of ID, address, Decision in Principle, Proof of Funds and then AML checks.
Calm down FFS!
Then, when the checks are done, probably after a viewing day with 20 x 30 min individuals viewing slots, the property will go under offer or Sold stc.
THAT was the premise of the original article – buyers calling up to be told, “It has just gone under offer.”
If people are leaving Sold stc properties on the market to get more ‘bait’ calls – yes, I get it – but keep it in perspective.
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“So it is no defence here to say that as soon as someone calls the agent they will find out that the property is no longer available and will have lost nothing. The effort by the consumer in calling to have their time wasted is enough to justify a prosecution.”
If that is correct then, as many have said before, The law is an ass.
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No, I think it’s this lawyer that’s the ass!
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‘Recently’ !!
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what about when the seller asks for the property to remain on the market, or it is re-marketed as the sale is not progressing at a pace acceptable to the seller. Anyway, plays out well for auctioneers -to us it is sold (contracts exchanged) or available.
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BREAKING NEWS!!
Lawyer says something might be illegal and you urgently need a lawyer!
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On that first premise alone, any and every characteristic which might potentially deter the average purchaser needs to be disclosed at the very earliest opportunity. We’d never sell anything by the time we’d listed the main road, private drainage, historic knotweed, rural (and therefore, potentially, isolated) location etc etc.
Some things need to be delivered in a certain way and it appears to ignore the fact that agents represent their clients’ best interest.
I also think the writer’s assumption as to an agent’s perceived conduct when receiving a call is pure conjecture and unwelcome in an article where his remit was to interpret objective legal details.
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A phone call from a potential buyer costs them very little or takes much time and most are delighted to be included on a list on the property’s file in case the sale falls through. In many areas 1 in 3 sales fall through, so a diligent agent collecting a list of interested parties is protecting his client with a safety net.
As to “main roads”, I think this should be declared on brochures as it saves a lot of wasted viewings and reduces values by 10%, but the head of NTSEAT when questioned at a NAEA Conference on this point said “people could see where it was on Google Maps”. This takes much more effort than a phone call and in a rural area the Trunk Road could be over 5 miles long in the same Postcode.
Over the past year some agents have listed properties on the Portals straight away with Sold STC tags to make them look good – but is this looking after the person who pays their fee?
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This article is a dead cat argument. Agents are required by law to continue marketing a property and report all offers received until contracts are exchanged and thus the property will remain on the property portal accordingly. By marking the property SSTC the agent is alerting prospective buyers that a buyer is in place and if they decide to view that is their choice. If the viewer decides to make an offer the agent is required to advise the vendor. It would be misleading NOT to mark the property SSTC. If the agent wishes to remove the property from the market they should obtain the vendors specific instructions to this effect in writing.
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You are right, but the point I believe they are making is that once a seller accepts an offer (stc), the property adverts must be updated as such. The property must not continue to be marketed ‘For Sale’, as to do so is misleading.
I wonder, for the agents who wish to keep a property ‘For Sale’ until the mortgage offer is issued (for example), would a clear statement at the top of the description satisfy the CPRs; something along the lines of:
“Please be advised that this property has received an acceptable offer. To all prospective buyers who still wish to view this property, please contact the agent without delay.”
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EYE NEWSFLASH: Leaving SSTC properties live on portals is ‘almost certainly a criminal offence’, says lawyer
Well the headline certainly indicates what this lawyer is maintaining. His whole argument is based on the premise that keeping a property on the market and stating that nevertheless it is under offer is misleading and therefor a criminal offence. That’s just bonkers. Or am I missing something?
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David Smith mistakenly thinks that there is any kind of legal regulation of the English property sector. Awwww, he must be new here.
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Considering what is involved with agreeing a sale (stc), and that not all portals update instantaneously, I expect a reasonable amount of grace would be given to agents who show they make an effort to update the status quickly. It’s the agents who leave properties online after completion that irks me (very easy for RM et al to check against HMLR’s public records), or who advertise a property for sale that has been withdrawn or is not actually on the market.
Next question. Should social media posts that promote the launch of a new instruction be deleted or edited once a property goes under offer? There’s a good angle to potentially sue some estate agents!
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EYE NEWSFLASH: Leaving SSTC properties live on portals is ‘almost certainly a criminal offence’, says lawyer
Well the headline certainly indicates what this lawyer is maintaining. His whole argument is based on the premise that keeping a property on the market and stating that nevertheless it is under offer is misleading and therefor a criminal offence. That’s just bonkers. Or am I missing something?
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Ye God’s, first day off of extended leave for over 2years and I think I’ll have a quick look on PIE, see if anything is going on, and I get…. this…. what utter tripe, any agent fielding calls on stuff going through structurally yet deliberately leaving it out there is an imbecile. And won’t be competing in the market for long.
A criminal offence to boot, according to this wigged hero, give me strength.
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“Almost certainly a criminal offence ” typical lawyer speak.
Either it is or it isn’t.
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It isn’t!
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I never cease to be amazed or saddened at the lack of legal, procedural and general property knowledge by people who wish to portray themselves to the public as ‘professionals’. For as long as the people entrusted to police the industry continue to turn a blind eye and fail to enforce the basics, let alone the more subtle/ debatable points, it will continue to attract the lazy, the incompetent and the criminal.
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Thing is Chris, the lazy and the incompetent can’t survive, there’s too much hoovering by people who do know what they’re doing, from the criminal perspective, twus ever thus and given the paucity of general EA news despite the best efforts here, the reporting of criminal activity is once a month at most, about agency, not about people who happen to be estate agents and do ( bad people ) things like all other people.
Flawed?
Yes.
Generally Bent?
Not in my experience.
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No its isn’t … The effort by the consumer in calling to have their time wasted is enough to justify a prosecution. Try and get that one into court if its marketed SSTC or not! The then Department of Trade and Industry made it perfectly clear decades ago (and never been rescinded by the ASA) that ‘an advert’ can never be required to post all its terms and conditions. Suffice to say ….. “subject to terms and conditions” is seen in advertising every days of our lives. The courts will always take into account what is considered ‘fair’ not what lawyers wants to make money out of.
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