Code Of Practice For Residential Estate Agents

Code of Practice for Residential Estate Agents – page 3 of 85cYou must not instruct other agencies to assist you in selling aproperty without the seller’s permission. If the seller givespermission, as the instructing agent, you are liable at law forthe actions of the sub-instructed agent and will be heldresponsible for any failures to comply with this Code ofPractice by that sub-instructed agent even if that sub-agentis not a TPO Member.5dNotwithstanding 5c above if you are instructed as a sub-agentor share listings via a website, you must continue to act inaccordance with all relevant provisions of this Code of Practice.5eYou must give your client written confirmation of hisinstruction for you to act in the buying or selling of propertyon his behalf. You must by law give the client written detailsof your Terms of Business including your fees and chargesbefore he is committed or has any liability towards you.Fair Contracts5fYour Terms of Business and your contract must be consistentwith the provisions of this Code of Practice and comply withthe Unfair Terms in Consumer Contracts Regulations 1999.5gYour Terms of Business should be written in plain andintelligible language. In particular you must use in your Termsof Business the specific definitions in the Estate Agents(Provision of Information) Regulations 1991. You must takeparticular care for example in defining and distinguishingbetween ‘sole agency’ and ‘sole selling rights’; and indescribing a ‘ready, willing and able’ contract. You must usethe relevant definitions in full, and clearly explain theimplications of the terms to your client.Fees and Charges5hAll fees and additional costs must be included in your Termsof Business. They must be fully explained, clearly andunambiguously stated in writing before the seller is committedto the contract.5iWhere the fee is a percentage you should clearly statewhether VAT is chargeable and must express it as an actualamount plus VAT. The example amount should be based onthe asking price. However, you must make it clear that, shouldthe selling price be higher or lower than the asking price, yourcommission fee will be correspondingly higher or lower.5jWhere you charge a fixed fee you should state the actualamount payable including VAT in the contract and ensure thatthe seller understands that the fee will not vary whatever thesale price.5kExcept for any previously agreed additional costs, commissionfees will become due on exchange of contracts.5lIn the circumstances where a buyer may become liable foryour fees, this liability must be communicated at the earliestopportunity such that in all forms of media, the propertyasking price is accompanied by a statement that ‘buyer’s feesapply’ and that websites allow for a click-through to aninformation pack and FAQs. Appropriate arrangements shouldbe made to provide the same information where nonelectronic access is present. The information pack shouldhave ‘key features’ of the approach as the first page andinclude a full explanation of all fees and additional costs, thecircumstances upon which they become due and advise thatby paying your fee, that amount may be considered as part ofthe chargeable consideration for the property and be includedin the calculation for stamp duty liability.Duration and Termination5m Your Terms of Business must clearly state the minimumduration of your instruction, and how it can be terminated byeither party. When a contract is signed by a client during a visitby you to his home, at his place of work, away from yourpremises or online, then he must be given a right to cancelthat contract within 14 calendar days of signing. He should begiven a ‘Notice of Right to Cancel’. Where the client wishesthe contract to begin before the end of the 14 day cancellationperiod you must obtain confirmation of that request in writing.Where you intend to recover costs incurred during thiscancellation period you must obtain the client’s agreement inwriting to those specific costs before work commences.5nIf you intend to charge the client a fee or recover costs forterminating the instruction, you must make this clear andspecify the amount of the fee and additional costs and theirpurpose.5pOn receipt of the seller’s instruction (includes executor,trustee, person holding power of attorney), or on your owndecision, to terminate your instruction, you must promptly givehim written confirmation that you are no longer acting for him,confirm the actual date of termination, and give details of anyfees or additional costs the client owes you (see 5s below).5qYour contract must allow for the required notice of terminationto be given before the end of the term, such that terminationby the client can occur at the expiry of the minimum term.Fee Entitlement and Client Liability5rAt the time of accepting instructions from a client, you mustpoint out and explain clearly to that client in your writtenTerms of Business: that you may be entitled to a commission fee if that clientterminates your instruction and a memorandum of sale isissued by another agent to a buyer that you haveintroduced within 6 months of the date your instructionended and where a subsequent exchange of contractstakes place.If no other estate agent is involved this time limit extendsto 2 years. and that the client may be liable to pay more than one fee if: that seller has previously instructed another agent tosell the same property on a sole agency, joint soleagency or a sole selling rights basis; or that seller instructs another agent during or after theperiod of your sole agency, joint sole agency or on asole selling rights basis.5sAt the time of the termination of the instruction, you mustexplain clearly in writing any continuing liability the client mayhave to pay you a commission fee and any circumstances inwhich he may otherwise have to pay more than onecommission fee.5tYour action in pursuing a commission fee or additionalcharges must be proportionate and reasonable and notintimidatory.

Code of Practice for Residential Estate Agents – page 4 of 85uAlthough nothing precludes you taking court action to pursuepayment of your commission account, it is generally expectedthat you will not take court action when a complainant hasreferred the matter to the Ombudsman. If however youdo pursue payment of your commission fee through the courtsyou must agree to the Ombudsman considering anyoutstanding service-related complaints after the court actionhas been determined.7gYou must not replace another agent’s board with your own,hide it or remove it from a property, without the client’spermission or without notifying the other agent.7hYou must comply with local legislation in relation to erectingyour boards.Published Material and Information about a Property7iYou must by law comply with the Consumer Protection fromUnfair Trading Regulations 2008. The Consumer Protectionfrom Unfair Trading Regulations 2008 require you to discloseany information of which you are aware or should be awareof in relation to the property in a clear, intelligible andtimely fashion and to take all reasonable steps that allstatements that you make about a property, whether oral,pictorial or written, are accurate and are not misleading.All material information (*) must be disclosed and theremust be no material omissions which may impact onthe average consumer’s (*) transactional decision (*) andwhere information is given to potential buyers or theirrepresentatives, it must be accurate and not misleading.7jThe written details of a property (sales particulars) must beagreed with the seller to confirm that the details are accurate.7kIn regard to leasehold properties, you should include basic keyinformation such as service charges; ground rent; the lengthof years remaining on the lease; any known special conditions,and advise sellers and prospective purchasers that there maybe additional fees that could be incurred for items such asleasehold packs. In relation to sheltered housing, you shouldinclude in sales particulars the existence and level (if known)of event fees (*).7lYou will be liable if you include anything in the salesparticulars which you have reason to doubt is correct.Signing5vYou must sign and date your Terms of Business before theyare given to your client. The client should be asked to sign andbe given a copy to retain. The client must be given sufficienttime to read them before agreeing to instruct you (refer alsoto paragraph 5m above).5w You should take reasonable steps to satisfy yourself thatthe seller is entitled to instruct you and to sign on behalf ofall co-sellers.Subsequent Changes5xAny subsequent changes to the Terms of Business must be: Mutually agreed by you and your client. Promptly confirmed in writing. Where appropriate, contained in a new Terms of Businesssigned and dated by your client.6. Energy Performance Certificates6aThe provisions set out in paragraphs 5f – 5k, 5m, 5n, 5t and 5vabove should be followed when entering into an agreementwith a seller for the supply of an Energy PerformanceCertificate (EPC) in relation to the property to be marketed.6bYou must provide adequate information to the seller to enablethe seller to understand the basic legal requirement for andcontent of an EPC, and use in relation to the marketing of theproperty.6cYou must advise the seller in writing of all charges relating tothe supply of an EPC and the terms of payment.7m All advertisements must be legal, decent, honest and truthfulin accordance with the British Codes of Advertising and SalesPromotion and Direct Marketing.8. Viewing and Access to PremisesViewings8aYou must take instructions from the seller as to hisrequirements regarding viewings, specifically whether or notthey should be conducted by you.8bYou must record any viewings that have been arranged for thatproperty, feedback from those viewings and pass this to theseller within a timescale agreed with your client. If thisfeedback is an offer, you should refer to section 9 below.For Sale Boards7b You must not erect any form of estate agency board at a propertyunless you have been instructed to market that property.8cBefore arranging any viewing, you must tell the viewer if youare aware of an offer that has already be

have recently sold and where completion has occurred, you must obtain the new owner’s prior permission. 3c When you advertise for new business your fees should be shown inclusive of VAT alongside a statement confirming that VAT is included. 3d If as a result of an unsolicited approach a seller is interested in using your services, you must draw to their attention, and expl ai nbf o r thy cm .