Statutory Changes to Estate Agents Act Could Seriously Threaten Property Purchasers

The Department for Business, Innovation and Skills announced in September of last year a Government consultation on potential changes to the Estate Agents Act 1979 (EAA) and on repealing the Property Misdescriptions Act 1991 (PMA). Following that consultation, a response document was produced laying out the Governments intentions for the two acts. The consequence, industry stakeholders fear, will be reduced protection for vulnerable consumers making the biggest investment of their lives.

The Estate Agents Act has been criticised for its 30 year old definitions of ‘Estate Agent’ and ‘Estate Agency Work’, which have never been adapted to reflect the great changes in Estate Agency with the invention and increasing use of the internet. In particular, the rise of the internet has lead to increasing numbers of private ‘intermediaries’ that introduce private buyers and sellers to each other, without getting involved in any other aspect of the process.

As it stands, these intermediaries can be affected by both the acts, despite not being estate agents, which restricts what they can and can’t say, burdens them with regulations and, most importantly, produces uncertainty. Views are divided on the current legal position of such organisations and the true extent of the EAA in particular.

The Government seeks to encourage innovation in a market which they found to be surprisingly stagnant and homogenous by reducing this uncertainty.

Repealing the PMA and changing the EAA will make sure that no truly intermediary bodies will be caught by the legislation. From an innovation standpoint, this might free up the market and allow new enterprises to break in. However, from a consumer standpoint, any property purchasers looking to buy privately could be exposed to organisations operating without legislative control.

Adverts produced by the intermediaries will not be content controlled, which could mean some adverts are misleading. Should these changes go through, it will never before have been more important to get a survey before purchase to reveal what you are truly getting.

Clive Browne MRICS, Chartered Surveyor and Director of Right Surveyors Sussex, a member of, commented:

“The Government’s decision to make businesses promoting private house sales exempt from the EAA could see thousands of property purchasers committing to the biggest investments of their life, without really knowing what they are buying.

“With the proposed changes looking certain to become a reality before the year is done, it has never been more important for home buyers to commission their own, independent survey on the property they plan to purchase. Without restrictions on property descriptions, people, particularly those buying from far away, could be led to believe a property is in good condition, only to find that thousands of pounds worth of remedial works are required on occupation.

“Purchasers should also be encouraged to submit their offer subject to survey. My clients often re-negotiate their initial offer price because of defects identified within my survey report”.

If you are purchasing a property, particularly through a private intermediary, don’t hesitate to talk to your local surveyor about how he or she can assist.

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