Full Disclosure: Agents, Landlords and Vendors Be Aware!
Many people will have heard of the Property Misdescriptions Act when buying a residential property and many will have broadly known that it meant when estate agents were marketing a property for sale, they could not misrepresent the property.
Under the Property Misdescriptions Act, estate agents could simply describe the property and leave out any negative information (such as noise nuisance or death in the property and so on) and it was for any prospective purchaser to find out any further details. As with many commercial transactions, it was caveat emptor (buyer beware).
Since 1 October 2013, this has all changed and it is now agents, landlords and vendors be aware as the Property Misdescriptions Act was repealed and the main legislation is now the Consumer Protection from Unfair Trading Regulations 2008 (known as CPR).
The Consumer Protection from Unfair Trading Regulations 2008 have been in place for years but as the primary legislation and focus was on the Property Misdescriptions Act little notice was given to the CPR and its enforcement.
One of the biggest changes is that the CPR apply not only to sales as the repealed Act did but also to lettings so both sales and lettings properties must be accurately and fully described. The onus is very much now on sales and letting agents, landlords and vendors as all parties are jointly liable so a party who has instructed an agent cannot use this as a defence if things went wrong.
The importance of the CPR is that all aspects of a property must be described and not just the good things. A good test is whether omitting a certain matter would affect the transaction (either the sale or letting of the property) or is there any information that needs to be disclosed that may affect someone’s decision to buy or let a property. For example, a description that omits to mention a noisy railway line behind the property would most likely be a breach of the Consumer Protection from Unfair Trading Regulations 2008.
The issue with the CPR is the lack of guidance as to what should be disclosed and when it should be disclosed. It could be said that all information that is likely to have any impact on whether someone buys or lets a property should be disclosed at the very earliest opportunity.
Whether any matter should be disclosed or not can also be very subjective and very much down to personal judgement. Examples could include whether or not to disclose a property is next to a park or school. These may be detrimental to some individuals but positives for someone else who may like the idea of having a school so near by and a park. The problem therefore lies with what to disclose as otherwise descriptions of properties could become long-winded and not practicable and actually cause consumer confusion.
If a landlord or vendor is using an agent, then they ought to use an agent with proper insurance in place just in case anything does go wrong. Importantly, a landlord or vendor should check the description prepared by the agent to ensure it is accurate and that it does not omit essential details which may affect a purchasing or letting decision.