Estate & Managing Agents - Consumer Redress Against Estate Agents

Home Information Pack legislation means that, for the first time, Government will be able to require estate agents marketing homes for sale with Home Information Packs to belong to an approved redress scheme. This will guarantee home buyers and sellers access to redress and help to deal with rogue agents.

Why do we need an estate agents' redress scheme? 

Recent research has shown that there is a high level of consumer dissatisfaction with estate agents and that customers find it difficult to complain and obtain redress when problems occur.

At present only 46 per cent of estate agents are members of the voluntary Ombudsman for Estate Agents Scheme, so many consumers are unable to obtain redress without going to the courts.

Compulsory membership of redress schemes will improve standards of service and provide a cost-effective means of redress for consumers.

The Housing Act 2004 allows the Government to require all estate agents marketing homes with Home Information Packs to belong to an approved redress scheme. This will take place as from 1 June 2007.

What sort of complaints will the redress scheme deal with?

The redress scheme will be able to deal with a range of complaints about estate agents relating to their acts or omissions in relation to a Home Information Pack (including the giving of advice as to whether such a Pack is required); and award compensation where complaints are upheld.  

Will estate agents be banned if they refuse to join a redress scheme?

Yes. Refusal to join a redress scheme will be treated as if it were an undesirable practice under the Estate Agents Act 1979. Continued refusal to join a scheme will lead to a banning order under the Act.

Why does the redress scheme not cover general complaints about estate agents not connected to Home Information Packs?

Part 5 of the 2004 Act deals with marketing homes with Home Information Packs rather than estate agent activities in general. It was not possible to amend the Bill at the time to include the full range of general complaints about estate agents.

Will you extend the redress scheme to cover general complaints about estate agents?

Yes. The Department for Trade and Industry, which has lead departmental responsibility for estate agent activities, is seeking to legislate as soon as possible to extend the coverage of redress schemes to include other kinds of consumer complaints about estate agents.