What is the Global Statement relating to agency?
RICS Global Real Estate Agency and Brokerage Professional Statement, 2016
What is the UK specific Professional Statement?
RICS UK Commercial Estate Agency Professional Statement, 2016
What does this replace?
RICS Purple Book, 2014
What does this statement set out? Name 3
- 12 core principle that agents must observe
- Act in an honest, transparent and professional manner
- Client Money is to be held separately
- Hold appropriate PII
- All advertising material is to be honest
What other areas of estate agency does this statement provide advice on?
- Acting Ethically – having a duty of care, gifts, and incentives and dealing with conflicts of interest
- Securing Instructions – legal requirements, AML checks, types of agency and H&S
- Marketing the Property – legal requirements, market appraisal and preparing particulars
- Implementing the disposal – methods of sale and legal requirements
- Acquisition of property – conflicts of interest, client communication and progressing purchases
What is the estate agency legislation?
Estate Agents Act 1979
When is this applied?
- Disposal or acquisition of an interest in land
- Freehold property
- Leasehold property with a capital value
- Land as well as buildings
What are the 7 key points?
- Clarity as to the terms of the agency (S18)
- Honesty and accuracy
- Agreement and liability for costs
- Legal obligation to tell the client about offers received
- Keep clients’ money separate
- Openness regarding personal interests (S21)
- Absence of discrimination
Who polices this act?
Trading Standards Office
What are the penalties for breach?
- The right to be an estate agent can be taken away
- Prohibition or warning order to be made against an agent
- Prohibition order stops an agent trading
- Warning order is just written warning
What is a cooling off period?
A period of up to 14 days is allowed for clients who change their minds and do not want to instruct the agent in accordance with the current consumer protection regulation
What are the Consumer Protection from Unfair Trading Regulations 2008?
This relates to potential buyers and vendors and extend the duty owed to not just clients, but to potential clients, viewers, buyers and actual buyers, to give accurate info or necessary ‘material’ information and not to make misdescriptions
What is the maximum penalty for a breach?
Unlimited fine and / or a prohibition order
What level of compensation could be payable?
What are the key points?
- Regulations apply to all sales and lettings agents
- Agents to have full duty of care to clients and interested parties
- Agents to declare everything they know about the property
- Agents must not exert undue pressure on potential buyers
- If info is discovered during the marketing process, this must be passed on to all parties
- Any omissions can also lead to a breach of the regulations
- Full due diligence is required for all new instructions
- Must be validated by the client
- Policed by Trading Standard Officials
- Disclaimers do not apply to this criminal offence
What are the Business Protection from Misleading Marketing Regulations 2008?
- Related to Business to Business activities and mirror CPR’s
- Prohibit misleading B2B advertising
What does Caveat Emptor mean?
- ‘Let the buyer beware’
- The starting point when discussing who has the responsibility for disclosure of all info
- This is the overriding common law principle that means the buyer should satisfy itself on all matters relating to the property
What does the Misrepresentation Act 1967 relate to?
A misrepresentation or a false statement of fact made by a party during pre-contractual enquiries, which has the effect of including the party to purchase
What is the penalty for a breach?
- The vendor/agent can be sued for damages and / or the contract can be rescinded
- Actionable as tort not criminal offence – form of negligence
What are the 3 tests to decide an agent’s liability for negligent statements?
- Foreseeability – the damage is reasonably foreseeable
- Proximity – the relationship can be characterised in law as being sufficiently proximate
- Fairness – it is regarded as fair, just and reasonable for such a duty of care to arise
When is planning required for non-residential advertising boards?
- Non-resi - boards over 2 sqm (flat) and 2.3 sqm (V board) – only one board per building
- Resi – 0.5 sqm (flat) and 0.6 sqm (v board)
When else is planning required for boards?
- Illuminated boards
- Remote boards
- Boards erected on listed buildings and in conservation areas
When must an advertising board be removed?
14 days after completion of transaction
How should an agent advice on VAT?
Specialist advice always recommended
What is a transfer of going concern?
Purchases are not treated as a supply or services for VAT purposes. This can reduce liability for VAT e.g. in the sale of a property let to a tenant. If the property is registered for VAT, and the rent is subject to VAT, it may be possible not to charge VAT on the sale.
What are capital allowance?
- An important form of tax relief upon capital expenditure for the construction or purchase of commercial property or business assets
- They can generate substantial tax savings / relief on the value of plant and machinery fixtures such as air condition and lifts
- The allowances can be offset against taxable profits
When must a freehold or lease be registered on Land Registry?
All freeholds and new leases granted for terms over 7 years or existing leases sold or assigned with 7 years left to run must now be registered with Land Reg
How many years must claimant prove for adverse possession?
What are the seven compliant details on a compliant title plan?
- Drawn to a metric scale (normally 1:100 or 1:200)
- Have a scale measurement bar
- Have a scale noted on the plan
- Include a 1:1250 scale location map (for urban areas)
- Full address including post code
- A north point
- Demise in red outlined on the inside edge of the property