Caveat Emptor – no longer!
CPRs and BPRs have placed a new obligation for disclosure in every walk of commercial life – not least in the world of house sales.
The ‘Consumer Protection from Unfair Trading Regulations 2008’ and ‘Business Protection from Misleading Marketing Regulations 2008’ change not only the way estate agents market properties and provide information to consumers, but also the basis by which they attract prospective clients.
Whilst the Estate Agents Act 1979 and Property Descriptions Act 1991 outlawed mis-description, they didn’t outlaw the omission of facts or information. The onus remained on the buyer to find out (‘Caveat Emptor’ – ‘Let the buyer beware’) .
Now, CPRs (enforced by Trading Standards through both civil and criminal actions) make it incumbent on agents to disclose to a prospective purchaser any ‘material information’ that they need ‘to make an informed transactional decision’ – whether this is information that the agent knew at the outset, or that they have become aware of during the marketing of a property.
CPRs even create an obligation to disclose information that might influence a prospective buyer to make ‘an informed choice’ whether or not to even view a property – such as, for example, the damning results of a previous survey that caused a previous buyer to withdraw from a purchase, or in leaving something out from a photograph such as the existence of an nearby power line.
One recent case involved a property that was advertised with off-street parking; despite the hard-standing in front of the house, the absence of a dropped kerb made it illegal to access it!
BPRs influence the basis by which agents gain instructions from potential clients; for example, it is an offence in a market appraisal to advise a likely selling price that is not based on a fair and honest assessment of current market conditions (but is quoted as a tactic to win the instruction) – equally, it is an offence to make unfair comparisons with their competitors, or to falsely claim to be a member of a professional body.
Whether vendors (as consumers themselves) will appreciate the obligation to tell buyers everything that is wrong with their property – as well as everything that is right – remains to be seen….