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OFT bans Shropshire estate agents

106/08    17 September 2008

The OFT has issued prohibition orders against two Wellington agents, banning them from estate agency work.

An adjudicator found that Charles Grizzle – a former employee of Imperial Homes UK Ltd – failed to disclose, to a potential purchaser promptly and in writing, that a property being marketed by the company was owned by Luke Morris, a former director of the same company.

In addition, a deposit was obtained from the purchaser, even though doing so is unlawful where an agent has a personal interest in the property, irrespective of whether or not that personal interest has been duly disclosed. The adjudicator also found that Mr Morris and Mr Grizzle fabricated a letter to the OFT in an attempt to conceal their actions.

The OFT has also made a warning order against the company itself. If it repeats the breaches of the legislation, it will also be banned from estate agency work. Mr Morris and Mr Grizzle are no longer employed by the company.

Mike Haley, OFT Director of Consumer Protection, said:

'Estate agents have a duty to immediately disclose to prospective purchasers that they have a personal interest in the sale of a property they are marketing. In this case, matters were made worse by, the fabrication of letters to the OFT. As this case shows, we will take the strongest possible action against those whose dishonesty make them unfit to practice estate agency.'

NOTES

1. The OFT can take action with a view to banning from estate agency work a person (and for the purposes of the Estate Agents Act this can also be a company or a partnership) who has been convicted of certain specified offences such as fraud, or other dishonesty or violence, or who has committed racial or sexual discrimination in the course of estate agency work, or who has failed to comply with the requirements placed on estate agents by the Estate Agents Act 1979 and its associated regulations ('the Act'), or who has engaged in specified undesirable practices, if an adjudicator finds that the person in question is unfit to act as an agent. The OFT can make a warning order if it is satisfied that a person in the course of estate agency work has failed to comply with a statutory obligation or has engaged in a practice which has been declared undesirable by the Secretary of State. The OFT can bar from estate agency work a person who fails to comply with the order and/or continues these undesirable practices in future.

2. Before a prohibition order or a warning order is issued, the person concerned has the right to make representations to the OFT as to why the order should not be made. If these representations are unsuccessful, subsequent appeal can be made to the Tribunals Service, an executive agency of the Ministry of Justice, on behalf of the Secretary of State.

3. Adjudicators issue and determine prohibition and warning notices under the Act. They do so on behalf of the OFT, but make individual and independent decisions based upon the contentions in a notice, the evidence attached to a notice and the representations of those to whom a notice is addressed. Representations may be made in writing and at an oral hearing.

4. An adjudicator determined that Charles Grizzle had breached the Act and the Estate Agents (Undesirable Practices) (No.2) Order 1991 ('the UPO') and that he and Luke Morris were unfit to carry on estate agency work generally. Prohibition orders were made in respect of Mr Morris and Mr Grizzle on 28 August 2008. A warning order was made in respect of Imperial Homes UK Ltd, of Wellington House, Unit 2 Tyrone House, Church Street, Wellington TF1 1DR, on 28 August 2008. The orders will not come into operation until the period in which any appeals could be made under section 7(1) of the Act has expired. Mr Morris, Mr Grizzle and the company have until 25 September 2008 to lodge such appeals.

5. Section 21 of the Act requires an estate agent to disclose to clients that he has, or is seeking to acquire, a personal interest in the sale of a property. It also prevents an estate agent from seeking or receiving a deposit in respect of a property in which he has a personal interest.

6. Under the UPO, an estate agent must disclose promptly and in writing that he, or any connected person, has, or is seeking to acquire a beneficial interest in the land or in the proceeds of sale of any interest in the land.

7. Under Section 3(3) of the Act, Mr Morris and the company were liable as business associates for the breaches of the Act and the UPO committed by Mr Grizzle.

8. After an order has been made, the person affected can at any time, and on payment of a fee, currently £2,500, apply to the OFT for the order to be varied or revoked.

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