Property Misdescription Act 1991

Property Misdescription Act 1991

The UK Government took the decision to repeal the Property Misdescription Act 1991 as they felt that two clearer pieces of legislation would safeguard property buyers more effectively when they make a purchase.

The previous act was relatively straightforward. In essence, if an estate agent marketed a property for sale they could not provide any false or misleading statements which could give the buyer the wrong impression.

There were a whole range of instances where this applied from not advising correctly of structural issues or making misleading statements about the local area.

The new law enforced the requirement for all estate agents or those marketing a property for sale to act reasonably and accurately to convey all information about the property and the local area to a potential buyer.

Property Misdescription Act 1991 Replaced

Since the 1st October 2013 the Property Misdescription Act 1991 was replaced by two new pieces of legislation;

Consumer Protection from Unfair Trading Regulations 2008 (CPR)

Business Protection from Misleading Marketing Regulations 2008 (BPR)

These new regulations ensure that estate agents cannot provide any misleading information to buyers and information must be accurate.

Furthermore, they cannot leave out important information or details which will affect the sale or value of the property, even if this may deter potential purchasers from going ahead with the sale.

As well as safeguarding the buyer, estate agents need to do a lot more research and find out all of the relevant facts about the property to ensure that they have a full and accurate picture so that they can relay this information to interested parties.

This means that estate agents now have to be very careful as innocent mistakes could be perceived as being misleading practices and penalties can be severe.

Session/Section 2: Legislation

What do the new regulations cover?

Even though the CPR and BPR were implemented five years ago, many estate agents and consumers are unaware of the regulations and their implications. Agents need to be fully aware that buyers now have far more protection against misleading sales strategies and information.

The CPRs prohibit any trader from implementing unfair commercial practices when communicating with customers. More specifically, estate agents are not permitted to engage in commercial practices which are unfair to sellers, buyers, potential sellers or potential buyers of residential properties.

The BPRs on the other hand prohibit all traders across all sectors including those operating in property from using misleading practices in business to business marketing strategies.

Furthermore, the Property Misdescription Act 1991 only applied to estate agents but both of the new regulations have a much wider reach and apply to letting agents and property managers too.

The way in which properties are described now has to be undertaken with caution. Statements such as ‘immaculate’ and ‘desirable area’ have to be backed up with fact.

It is always recommended since the implementation of these new guidelines that estate agents request that clients such as landlords or vendors sign a statement to verify the accuracy of the property particulars.

Consumer Protection from Unfair Trading Regulations 2008 (CPR)

So far we have explored when the new regulations were implemented and what they relate to. In the following sections you will learn about the specifics of each regulation and understand what exactly those involved in marketing property should and should not do.

There are many instances where the CPRs can be applied in the property sector ranging from property discounts that don’t really exist to intentionally leaving out a piece of information which may result in a different decision.

The Consumer Protection from Unfair Trading Regulations offer comprehensive protection to consumers to safeguard them from misleading or unfair trading practices as well as misleading omissions and even aggressive sales tactics.

The Consumer Protection from Unfair Trading Regulations prohibits any business operating in the property sector from using unfair practices when they deal with customers. In relation to property the CPR covers;

  • The provision of marketing or other services which relate to the sale of land
  • Any business relating to the property sector such as estate agents, agents, letting agents, Internet property managers, solicitors overseeing legal advice services classed under the remit of estate agency work, auctioneers or property developers
  • The sale of property or land

An unfair practice can be described as;

  • Providing consumers with misleading or false information – misleading actions
  • Concealing or failing to provide requested information – misleading omissions
  • Applying undue pressure on consumers to make a decision – aggressive practice
  • Failing to implement steps to maintain an adequate standard of care and skill reflecting honest practice
  • Undertaking any of the banned 31 practices as outlined in the Consumer Protection Regulations 2008 under Schedule 1.

Business Protection from Misleading Marketing Regulations 2008 (BPR)

The Business Protection from Misleading Marketing Regulations is very similar to the CPRs but they relate to business customers rather than an individual consumer.

The regulations prohibit any misleading marketing activities such as advertising.

Furthermore the BPRs outline guidelines under which businesses can compare themselves to the competition.

Breaches of these regulations are taken very seriously and businesses who treat their customers unfairly may face civil or even criminal sanctions.

To avoid any sanctions an estate agent should;

  • Accurately advertise the services that they are offering
  • Implement robust systems and safeguards to ensure that their marketing materials are accurate and they do not omit important and relevant details
  • If they see or hear something from a third party with regards to a problem with a specific property, they need to undertake the relevant research to obtain facts themselves
  • Avoid using ‘aggressive’ tactics such as placing pressure on consumers to make an offer, increase their price or skip certain steps to hurry the sale to completion