FOOL'S EYE VIEW
Protect Yourself From Naughty Estate Agents

By Jane Mack (TMFJane)
February 27, 2003

A recent court case involving estate agency fees has opened the door to challenges from dissatisfied sellers who are unhappy about high fees and poor service. The judgement has been described as a 'wake-up call to agents who don't follow the rules' by the Royal Institution of Chartered Surveyors.

Gary and Sharon Slater put their Battersea flat on the market with the estate agency chain, Foxtons. After several months with no offers, Foxtons told them over the phone of a 'first-time buyer' who had made an offer of £185,000 for a flat that had been marketed for £220,000. After turning down the offer, the 'first time buyer' kept on upping his bid eventually reaching £200,000.

The Slaters later discovered not only that the mystery buyer was actually an experienced property investor, but also that they had not been given written details of other offers as required by Estate Agency laws.

To make matters worse, before completion, the Slaters visited their flat only to find that it was full of furniture that wasn't theirs, that there was another agent's 'For Sale' sign outside, and that the flat was on the market for £234,000. The prospective purchaser had been given the keys by Foxtons before completion!

What if the purchaser had decided not to buy the flat and decided to squat? And what if a higher offer had been made by someone which was not passed on to them?

As you might imagine, the Slaters were rather unhappy about paying Foxtons' agency fees of just over £5,000, but they were told that there was no formal internal complaints procedure, that the agency was not a member of any professional body nor of the Estate Agency Ombudsman scheme, so there was no-one they could complain to.

The Slaters sent a cheque for £4,000, offering to pay the rest once Foxtons had given them a satisfactory explanation for their handling of the sale. Foxtons took them to court – and lost!

The Slaters might have found things easier if they had chosen an estate agent that was a member of a professional body or, even better, subscribed to the Ombudsman scheme.

The National Association of Estate Agents is the main professional body and has some 10,000 members, although this represents only about 60% of agencies around the country. Unfortunately, it doesn't really have any teeth. Membership is voluntary and, if something goes wrong, the most it can do is either caution a member, issue a formal warning or fine, suspend or expel it for breaching the Code of Conduct. It doesn't even have the authority to order its members to pay compensation to a complainant.

Any complaints about money or compensation have to be referred to the Small Claims Court and complainants who say there's been a breach of the Estate Agents Act 1979 or the Property Misdescriptions Act 1991 are simply are advised to contact their local Trading Standards Department.

The Ombudsman for Estate Agents fares rather better and has more teeth, in that it can make awards of up to £25,000 as compensation for a breach of the rules. However, since the scheme is, again, voluntary, the Ombudsman can only deal with agents who have signed up to it. Foxtons isn't one of them.

You'd have thought Foxtons wouldn't have gone to the bother of taking the Slaters to court over a mere £1,200. It's cost them far more than that in legal costs, let alone a bit of bad publicity. But thank goodness they did.

Not only does it serve as a warning to estate agents that they need to improve their standards, but it also tells consumers that they need to choose an agent that is a member of the Ombudsman scheme. There are more than 850 corporate and independent companies in the scheme, with more than 4,000 offices between them, so it shouldn't be too hard to find a suitable agent

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