Which? investigation reveals estate agents breaking the law and using unfair contracts

In March, Which? asked ten home owners in England to put their properties on the market. Each requested valuations from three estate agents and asked for copies of their contracts.

Researchers then posed as potential buyers for the properties.

Even in this snapshot test, Which? found one agent that seriously violated the law. It lied to one of Which?’s buyers by saying that a higher offer had already been rejected and encouraged them to come back with another offer – the higher offer was a complete fabrication.

This goes to the heart of the Estate Agents Act 1979. Although the act sets out the way estate agents are meant to behave, there is no systematic way to prevent these types of breaches of the law, because no one sees it being broken.

Less serious breaches were more widespread in the investigation. Agents are supposed to pass on all offers promptly in writing. Unfortunately, only two of the six agents that received offers did so. The others passed on information only over the phone, and several were less than prompt in telling their clients what was going on.

Unfair or misleading contracts were the most common problem found by Which?’s undercover researchers. Some contracts were needlessly complicated, some misleading, and some that are potentially unfair in law. In the worst cases, unfair or misleading contracts leave people paying thousands of pounds even if an agent has done nothing to help the sale.

Which? has started taking action against the unfair contract terms of the worst offenders found in the investigation. It is also working to seek out estate agents who aren’t playing by the rules, whether they are deliberately using confusing contracts or taking commission when they shouldn’t be. People who have been stung by estate agents can log onto the new Which? website, www.which.co.uk/campaigns /hometruths, and share their stories, to help Which? put an end to their dirty tricks.

Most estate agents investigated weren’t even following the basic provisions of the law. Which? is calling on the Office of Fair Trading, responsible for enforcing the laws for estate agents, to take measures to address this.

The first measure is being able to see what estate agents are up to; for example every estate agent should be subject to unannounced checks of their records.

The second is calling time on voluntary regulation. At present, only a third of estate agents are signed up to the voluntary ombudsman scheme, whereas people need guaranteed access to a body with the power to settle disputes.

The third is mandatory training for all estate agents. Currently, anybody can set up as an estate agent without any formal qualifications.

Helen Parker, editor of Which?, says:

“Our undercover investigation cast light on parts of the house-buying process the public doesn’t usually see, with worrying results. Which? would like to hear from people who have been stung by estate agents so that we can work to put an end to their dirty tricks. Without anybody checking to ensure they are behaving competently and honestly, some estate agents are routinely getting away with using dodgy contracts and even breaking the law.”