Trading standards leaflets

Information for estate agents - property descriptions

There is legislation that controls property developers as well as estate agents, creates criminal offences for making certain false or misleading statements. Also, there are Regulations that prohibit omitting material information from consumers, if that omission could cause the consumer to make a different decision.

Care should be taken when using general descriptions relating to location, environment, photographs, measurements, parking and pricing. General disclaimers in small print, telling buyers not to rely on details, won't be effective in preventing offences. This also applies to information provided on your website.

In the guide
The legislation
Recommended practices
General descriptions
Location
Environment
Photographs
Measurements
'New instructions'
Pricing
Tenures
Extensions and loft conversions
Communal areas and parking places
Re-checking
Disclaimers
Penalties
Other matters that may affect you
Further reading

The legislation
The Property Misdescriptions Act 1991, which controls property developers as well as estate agents, creates criminal offences for making false or misleading statements about any of the matters in the Property Misdescriptions (Specified Matters) Order 1992. You do not have to refer to any item in the Order, but if you do, your description of it must be truthful.

While there was no general requirement under the Act to disclose information to consumers, the Consumer Protection from Unfair Trading Regulations 2008 prohibit omitting material information to consumers if that omission could cause the consumer to take a different decision. Material information is defined as 'information which the average consumer needs, according to the context, to take an informed transactional decision'.

Things you say verbally about the property will be covered, as well as the printed word, photos, plans, models, websites, etc.

The Act does not prevent you from acting in vendors' interests by presenting property in the best light, provided what you say, or do, does not mislead the purchaser or the vendor.

Recommended practices
Ask vendors to sign a document confirming particulars are correct before you market a property. Give them a chance to amend anything that is wrong. This won't protect you if you print a misdescription you could have reasonably checked out for yourself, but it will minimise the risk.

Think about all the descriptive phrases you use and ask yourself what they will mean to an average purchaser.

Make it somebody's task to proofread particulars and sign to say they have done so.

When you get enquiries about a property, ensure the person who prepared the details answers the questions, and keep a record of what is said on file. You won't be held responsible for what vendors tell purchasers in your absence unless you knew what they were going to say, but remember that purchasers may forget who told them what.

Check everything you can. Ask to see receipts and guarantees for work carried out. Call to check council tax bands. Ask for evidence of sales and turnover if you want to describe the success of a business property.

Set up a process to ensure that your staff are adequately trained and that their work is regularly checked. You should consider random double-checking of property details against the property itself during this auditing process. Any deficiencies can then be dealt with by issuing corrected particulars and retraining where necessary. You should keep records of training and checks made.

General descriptions
Terms such as 'immaculate condition' or 'recently decorated' are not banned by the Act, but these terms will be taken to refer to the entire property unless otherwise stated. If there are any particularly attractive features, your client will obviously expect you to use them as selling points but they should not be emphasised to the exclusion of bad features if the overall result is a misleading description.

Location
Don't stretch popular and desirable areas too far - use the correct postal address. If a house is in one county geographically, but its postal address is in a neighbouring county, you should include both with equal prominence.

Comments concerning the proximity of properties to local services should be used with care. Terms such as 'close' or 'easy access' are best avoided, as are estimates of journey times. A statement of the actual distance is more accurate - for example, three miles to junction 34 of the M4.

Environment
If a house has open fields on three sides and an abattoir or nightclub on the fourth, the safest option is not to refer to the outlook. If you said that it was surrounded by views across open fields, you would mislead unless you made equal reference to the view on the fourth side. If you use a photograph of the back or the side of a property on its own, you should make that fact clear.

Photographs
A photograph can be misleading. Do not doctor photos or use extreme lenses. If you take a photo of the view from a bedroom window, but cannot include the rubbish dump, don't say 'panoramic views' or 'unspoilt countryside'.

Measurements
You should try to make measurements as accurate as you can. Sonic measures (such as tape measures) are not specifically banned, but, as with any measuring instruments, they should be calibrated every 12 months and used with great care. Laser measures appear to be easier to use and less likely to give misleading readings, but should still be checked on a regular basis against a known distance.

Be careful with gardens, where large length or area measurements can be involved.

'New instructions'
You may advertise a property as a 'new instruction' to your agency for only a short period (we would suggest a month) after you have been asked to become the vendor's agent. This applies even if the property has been advertised previously with another agency.

Pricing
The Consumer Protection from Unfair Trading Regulations 2008 covers the pricing of all properties and you must be careful not to mislead consumers with regard to the previous price of a property if you are claiming a reduction in price. The Pricing Practices Guide published by the Department for Business, Innovation and Skills (BIS) gives guidance as to how price reductions can be advertised.

You should also be aware that the Regulations ban a trader from passing on materially inaccurate information about market conditions with the intention of getting the consumer to make a purchase at less than normal conditions (for example, an agent telling a consumer that he has sold several properties in the same area, just like the one the consumer is viewing, at a certain price, in order to get the consumer to buy at an inflated price, if this information is not true).

Pricing of newly built and newly converted properties is not covered by the Property Misdescriptions Act 1991, but pricing of second hand and commercial properties is a 'specified matter' and as such, any statement must not be misleading. We would advise you to follow the Pricing Practices Guide mentioned above for this as well, to ensure that you do not mislead anyone.

Of course, you can change the price at any time and not claim a 'reduction' (but make sure all copies and methods of advertising a property are changed at the same time).

Tenures
You should be able to provide adequate evidence to show that you have tried to obtain information on the length of any lease or freehold of the property. Alternatively, say that this aspect has not been checked.

Extensions and loft conversions
Conversions have created problems where an estate agent has described a room as a bedroom, but it has not been subject to planning or building regulation approval and, thus, is not suitable to be used as such. If a vendor is unable to supply details, then the planning office should be approached for confirmation. If you are unable to establish that the extension was correctly approved, then great care needs to be exercised - either describing the room as a boarded loft area, or stating clearly that planning permission for the room has not been provided.

Communal areas and parking places
Problems have arisen when a vendor has assumed that they own, or have rights over, a particular parking space when actually they only park there by habit or private arrangement. If a parking space, used by a vendor, is not clearly within the boundary of a property, further checks should be made or great care should be used when describing this feature.

Re-checking
If you have a property that has been under your instructions for a long period of time, it is advisable to check whether the details are still correct. If particulars are issued that contain information that is no longer accurate, an offence could be committed.

If a new road is planned, or if the local train operator withdraws a train service to which you had referred, you should modify your details and advertisements. You should consider a system of re-verifying particulars with vendors and including a clause in their contract requiring notification of any material alterations they make to property post-marketing.

It is suggested that particulars should carry the date on which they were compiled or revised to avoid confusion.

Disclaimers
The Act does not provide that disclaimers may be used, nor does it prohibit their use.

General disclaimers in small print, telling buyers not to rely on details, won't be effective in preventing offences. In particular, they are unlikely to be effective in relation to any misleading omission under the Consumer Protection from Unfair Trading Regulations 2008.

Case law under the Trade Descriptions Act 1968 (now mostly repealed) stated that any disclaimer that is applied must be as bold, precise and compelling as the statement to which it relates, be as effectively brought to the notice of anyone to whom the property may be sold, and equal the description in the extent to which it is likely to get home to prospective purchasers, but this may well not be sufficient under the Regulations, so you are advised to be accurate with all the information you supply.

However, there are some cases where a specific qualifying description may be acceptable. For example, if the vendor claims, without documentary evidence, that the property was treated for dry rot, you may only mention this if you say as part of that description that you have not seen any documents to verify this. A similar qualification might be applied to the working order of household appliances, or central heating, or claims about the history of a property. The crucial fact in assessing whether a qualified description is valid is the ease with which you could have reasonably checked it.

Penalties
If a case is heard in the Magistrates' Court, the maximum fine is £5,000 per offence. One set of property particulars might contain several offences. If the case is heard in the Crown Court, there is no limit to the fine.

In addition, the Office of Fair Trading (OFT) can use its powers under the Estate Agents Act 1979 to issue a warning or prohibition notice. Such notices can prohibit an offender from carrying out some, or all, types of estate agency work. Trading standards services can also take action under the Enterprise Act 2002 if an estate agent misleads consumers or generally acts in an unfair manner.

As well as carrying out spot-checks, trading standards officers also deal with complaints. You should be ready to cooperate with officers and show them any documentation they need to see. All officers carry credentials, which they will gladly show.

Other matters that may affect you
The Consumer Protection from Unfair Trading Regulations 2008 apply in relation to all elements of the work of the estate agent, so will not only cover descriptions you apply to properties, but also any description you make concerning the service you provide, as well as the service itself. For example, if you display a 'For Sale' board outside a property you are not authorised to market, or display a 'Sold' board outside a property you have not sold, you are likely to be breaching the Regulations and could face civil and/or criminal action.

The Cancellation of Contracts made in a Consumer's Home or Place of Work etc. Regulations 2008 apply to a contract, which is not an excepted contract, between a consumer and a trader that is for the supply of goods or services to the consumer by a trader and which is made at any of the following:

• during a visit by the trader to the consumer's home or place of work, or to the home of another individual
• during an excursion organised by the trader away from his business premises
• after an offer made by the consumer during such a visit or excursion

Where the Regulations apply, the consumer has a right to cancel the contract within a set period, and the Regulations set out strict requirements as to how this right to cancel must be communicated to the consumer. If this right to cancel is exercised then in most cases the contract is treated as if it had never been entered into and monies paid become recoverable. See our leaflet 'A guide to contracts concluded in consumers' homes or workplaces'.

The Home Information Pack (Suspension) Order 2010 suspends the duties imposed by sections 155 to 159 of the Housing Act 2004 in relation to HIPs. The order came into force on 21 May 2010 and from this date there is no requirement to have or provide a HIP when marketing a residential property. There is likely to be some confusion caused by this suspension regarding Energy Performance Certificates (EPCs). A seller of residential premises has a duty to ensure that an EPC (where no such certificate is already available) has been commissioned before marketing of the property commences. There is also a duty on the person acting on behalf of the seller to be satisfied that an EPC has been commissioned before commencing marketing and both the seller and a person acting on their behalf are under a duty to make reasonable efforts to secure an EPC within 28 days. These requirements are NOT suspended.

The Consumers, Estate Agents and Redress Act 2007 places a requirement on estate agents to belong to an approved redress scheme.

Under the Town & Country Planning (Control of Advertisements) Regulations 1992, the display of temporary 'For Sale', 'To Let' or 'Sold' boards is allowed by way of a 'deemed planning consent', providing certain criteria regarding maximum size, etc, are met. Once a sale has gone through, or a premises has been let, a sign such as 'Sold' or 'Let' may only be displayed for a maximum of 14 days. See also Outdoor advertisements and signs: a guide for advertisers published by the Department for Communities and Local Government.

Most of the Estate Agents Act 1979 is enforced by the OFT by a system of negative licensing. This means you do not need a licence to act as an estate agent, but if you breach the legislation, you may be banned. It covers various undesirable practices, such as failure to declare a personal interest, failing to pass on offers, discriminating against buyers that do not take other services, conviction for other offences involving fraud or dishonesty, etc. The part enforced by trading standards services relates to the maintenance and auditing of clients' accounts.

If you offer credit, or introduce people to sources of credit, you are a credit broker and need a licence from the OFT. See also our leaflet 'Credit brokerage'.

Anyone who lets furnished accommodation as a business activity, including letting agents, estate agents and private landlords needs to be aware of the safety requirements - see our leaflet 'Safety of goods in rented accommodation - landlords and letting agencies'.

Further reading
The Office of Fair Trading has produced guidance for property sales businesses.

Please note
This leaflet is not an authoritative interpretation of the law and is intended only for guidance. Any legislation referred to, while still current, may have been amended from the form in which it was originally enacted. Please contact us for further information.

Relevant legislation
Consumer Credit Act 1974
Estate Agents Act 1979
Property Misdescriptions Act 1991
Property Misdescriptions (Specified Matters) Order 1992
Town & Country Planning (Control of Advertisements) Regulations 1992
Enterprise Act 2002
Housing Act 2004
Consumers, Estate Agents and Redress Act 2007
Cancellation of Contracts made in a Consumer's Home or Place of Work etc. Regulations 2008
Consumer Protection from Unfair Trading Regulations 2008
Home Information Pack (Suspension) Order 2010

Last reviewed/updated: December 2012

© 2013 itsa Ltd on behalf of the Trading Standards Institute.