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Redress: ensuring fair and honest treatment for all buyers and sellers

publication date: Oct 14, 2008
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author/source: Gareth Thomas
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redressNew rules to make sure all estate agents in the UK join an approved redress scheme came into force last month. 

The Ombudsman for Estate Agents and the Surveyors Ombudsman Service schemes give buyers and sellers of residential property somewhere to go if they have a legitimate complaint that can’t be resolved without help. 

For most NAEA members the new laws will have little impact. Before the regulations were introduced estate agents in England and Wales already belonged to approved redress schemes in relation to complaints about Home Information Packs (HIPs) and 90 per cent of estate agents in the UK belonged to voluntary schemes, up from 40 per cent in 2004.

Members of voluntary schemes are automatically members of the new approved schemes, but members of HIPs only schemes will have to sign up. Estate agents that have not joined risk repeated fines of £1,000 and could even face a ban from carrying out estate agency work in the future. 

These new laws have been introduced in response to an Office of Fair Trading report into the sector in 2004. The report found that while the industry performed well, estate agents often fell short of consumers’ expectations and that those consumers had very limited opportunity to complain and get compensation. 

Research shows that 21 per cent of sellers and 23 per cent of buyers experience problems with their estate agent. Those problems range quality of service issues to more serious matters such as neglecting to disclose a personal interest or failing to pass on offers promptly and in writing. 

In addition to providing consumers with access to redress, the schemes will help protect consumers from unfair practices by passing on information to enforcers when they come across serious misconduct. But it isn’t just unhappy consumers that will benefit from the new rules. 

Compulsory membership of an ombudsman scheme should raise standards of service across the industry and help to create a level playing field with fewer rogue estate agents. The laws should mean that the reputation of honest, wellrun businesses will not be damaged by the actions of the irresponsible few. 

Both ombudsman schemes are independent and impartial, which means that if you do have a dispute with a client, it can be sorted out without going to the courts, saving you money. 

Further changes to estate agents’ legislation also took place last month. Measures providing enforcers with increased entry and inspection powers, and the Office of Fair Trading with increased grounds to issue warning and prohibition orders, also came into force on 1 October 2008. Additional provisions in 2009 will require estate agents to make and keep records of transactions including offer letters. 

Estate agents play a key role in bringing together buyers and sellers in the housing market. In fact over 90 per cent of people buying and selling a home in England and Wales use an estate agent. 

But the regulation of estate agents has not been effective enough in the past. The new laws should mean that when people make one of the biggest purchases of their lives they are sure they will be treated fairly and honestly. Which can only be good news for everyone.