Door closes on rogue estate agents

The proposal in the Queen's Speech last week to get rogue estate agents under control has been greeted with great rejoicing throughout the land. At long last, rather than volunteering to join the current redress systems such as the Ombudsman for Estate Agents (OEA) or the National Association of Estate Agents (NAEA), all agents will be forced to sign up to a new independent redress system. That is, if the Consumers, Estate Agents and Redress Bill goes to the next stage and comes into force in 2008.

What would the new bill mean?

If the bill does take effect, complaints against estate agents by consumers could result in financial compensation through a new ombudsman body, yet to be set up, without having to involve a court. Any agent who is not a member of the new redress scheme would no longer be able to trade. The Redress Bill also proposes to give the Office of Fair Trading (OFT) sharper teeth when is comes to considering an estate agents eligibility to practice. Trading standards officers will be given more power to inspect an estate agent's file on a transaction and agents themsleves would be required to keep records of buying and selling activities which could then be inspected by trading standards officers.

What's the situation now?

Currently, estate agents are governed by the Estate Agents Act, which was last reviewed in 1979 - almost 30 years ago. Estate agents are self-regulating and can choose to join the OEA scheme only if they wish; currently around two-thirds do. They can also join professional body, the NAEA that requires them to comply with its code of conduct. Principal, partners and directors of any NAEA-member agency must also be members of the OEA scheme. This means that if you choose a non-OEA registered agent, you would have no recourse for redress if you had a complaint, apart from going through the courts.

Too little too late?

While organisations such as Which?, the OEA and the Royal Institute of Chartered Surveys (RICS), welcome the bill, they feel it is rather a case of 'shutting the stable door after the horse has bolted'. While complaints would be taken care of under the new bill, they would like to see initiatives put in place to prevent malpractice in the first place. Charles Smailes, president of the NAEA, says that he would urge the government to make it compulsory for all agents to be a member of a regulatory body. However, while this will offer further protection and redress, the bill won't alter the following facts:

1. Anyone can operate as an estate agent

2. Estate agents are not licensed

3. There are no minimum professional standards for estate agents

24 November 2006 © Moneyextra.com

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