A delayed scheme to deal with complaints against estate agents will start in October, according to the Office of Fair Trading…
All estate agents will have to be members of an approved free ombudsman service that will deal with complaints and could order compensation.
The planned start date in April was put back owing to a delay over endorsement of schemes by the OFT.
A report earlier in the week said agents should be formally regulated.
Complaints about estate agents include inaccurate description of properties or delays in passing on offers to sellers.
But at the end of 2006, only 60% of estate agents were members of voluntary ombudsman schemes. A disproportionate number of complaints about estate agents are about firms not in these schemes.
These cases were highlighted the most during the boom years of the housing market as anyone can set up as an estate agent in the unregulated industry.
From 1 October, under the Consumers, Estate Agents and Redress Act of 2007, an estate agent can be prevented from operating if it is not attached to an OFT-approved ombudsman service that can resolve disputes and offer compensation.
The OFT has now given approval to the Ombudsman for Estate Agents Company Limited to run one of these schemes, and is considering bids from two more.
“House buyers and sellers will soon have access to a free, easily accessible and speedy estate agents redress scheme that will ensure independence, fairness and transparency,” said John Fingleton, OFT chief executive.
In a report published earlier in the week Sir Bryan Carsberg, who used to head the OFT, called for estate agents to be members of ombudsman schemes in one of his 30 recommendations.
He also said estate agents, letting agents and managing agents, who handle residential property, should be subjected to formal regulation and complete basic qualifications in order to offer customers better protection.
“It is clear that consumers have significant dissatisfaction with the present situation and want something done to improve it,” Sir Bryan said.
Abuse of position
The OFT does have powers to ban any agents who break the laws about misdescribing a property, handling a client’s money, not declaring an interest in a property, or are found to have engaged in some other form of dishonesty.
For example, this week the OFT banned Daniel Zane, ex-director of former Hertfordshire estate agents Vue Estates Ltd, from estate agency work.
The regulator said he had failed to give written details of his fees and charges before a entering a contract with a prospective buyer. He also failed to pass on offers promptly and misrepresented the status of a potential buyer.
“This is a very serious example of an estate agent abusing his position to act for his own benefit,” said Mike Haley, the OFT’s director of consumer protection.