Estate agency

The OFT has a duty to supervise the working and enforcement of the Estate Agents Act and if you are engaged in estate agency work you have to comply with the Act. The OFT can take action against those who do not comply - we can warn them about their behaviour or ban them from estate agency work.  

Some estate agents sign up to voluntary codes of practice to demonstrate to consumers that they provide good standards of customer service. The OFT operates a Consumer Codes Approval Scheme (CCAS). The scheme approves codes that meet certain criteria and provide benefits to consumers above those required by the law. The scheme gives customers a way to identify businesses that have pledged to treat them fairly if they have a problem, and it encourages businesses to deliver high standards of customer service.

You can find out more by visiting the CCAS website.

Your charges

You must give clients clear written information about your fees. This should include how much they will be charged and when payments will be due. If you don't know the exact amount of fees, you must explain how they will be calculated. You should also give details of any additional charges, for example the cost of advertising in local newspapers.

If you don't know the exact amount of additional charges, you must give an estimate and explain how they will be calculated. You must also state certain terms you may use in your contracts such as 'sole agency' and 'sole selling rights' in the exact wording prescribed in law.

Your duties

You must tell clients promptly and in writing:

• of all offers made on their property (unless they inform you in writing that they are not interested in receiving offers of a certain type)
• if you or someone connected with you, such as a relative or a business partner, is seeking to acquire an interest in their property (this would normally involve you or the connected person wishing to purchase your client's property).

If you have a personal interest in a property, you also have to declare this in advance to potential buyers.

You must not discriminate against a potential buyer who does not want to take up other services you provide (for example, the potential buyer may not wish to obtain a mortgage or some other form of financial product from you). Nor must you misrepresent the details or existence of any offer or the existence or status of any potential purchaser.

HIPs - Advice for estate agents

The Home Information Packs (HIPs) regulations came into effect on 1 August 2007. All homes for sale in England and Wales with four or more bedrooms will need to have a HIP. The HIP is provided to prospective purchasers and contains details of:

• the property title
• energy performance
• planning permissions
• searches.

From 10 September 2007 all homes in England and Wales marketed with three or more bedrooms will require a Home Information Pack.

The HIPs regulations affect all estate agents in England and Wales and a failure to comply with the new Home Information Packs regulations could result in a ban from estate agency work. A breach of the HIPs regulations is an 'undesirable practice' under the Estate Agents (Undesirable Practices)(No.2) Order 1991 and would be a trigger under the Estate Agents Act for the OFT to consider whether an estate agent is fit to practice.

The OFT can impose a ban on an estate agent found to have seriously breached  the Act and can also issue a Warning Order where the breach is serious but not serious enough to warrant a ban. Once this has been issued, if the agent continues to breach the Act in the same manner, the OFT can immediately make a Prohibition Order banning them from practising as an estate agent in the future.

Information on HIPs for estate agents can be found on the Department of Communities and Local Government website.

Other services

If you - or someone connected to you - is offering or intends to offer other services to potential purchasers such as arranging mortgages or life insurance, you must tell your clients in writing about these services.

To find out more, see the Estate Agents Act area of the site.

Money Laundering Regulations 2007

From 15 December 2007, the OFT will supervise estate agents under the Money Laundering Regulations. We have published guidance to help you comply with your obligations under the regulations.

Download Money Laundering Regulations 2007: core guidance (pdf 160 kb).

Download Money Laundering Regulations 2007 - Information for estate agents and consumer credit licence holders (pdf 76 kb).

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