The Ombudsman's second Interim Report of 2012 is directed at the industry and specifically focuses on the commission-earning clauses used within estate agents' agency agreements.

Following The Property Ombudsman's renewed call for compulsory redress for letting agents in his Annual Report, his second Interim Report of 2012 is directed at the industry and specifically focuses on the commission-earning clauses used within estate agents' agency agreements.

'Proposed changes to the laws governing estate agency in Britain could see some homebuyers with no more protection than if they were buying a car in a private deal'.

Sales commission fees in letting agreements

The Ombudsman explains why sales commission fees in letting agency agreements is no longer a grey area

The Ombudsman and TPO's Independent Council's full response to the Department for Business, Innovation and Skills (BIS) proposal to amend the Estate Agents Act 1979.

TPO Response to BIS Consultation to Amend the EAA 1979

A national event by estate agents to help the homeless has been launched with the help of the Ombudsman and the Chairman of the Board.

The Property Ombudsman, Christopher Hamer, and Bill McClintock, chairman of the company that operates the ombudsman scheme, borrowed a tandem from Hayball Cyclesport in Winchester Street, Salisbury, so they could show joint support for a 3,000 mile charity bike ride around Britain.

The Property Ombudsman Scheme (TPO) is canvassing member firms over the provision of Client Money Protection (CMP) insurance.

'Whilst membership of TPO requires all residential sales and letting agents to abide by the TPO Codes of Practice, have Professional Indemnity Insurance, and agents holding clients' money to deposit this money in a separate clients account, it does not currently require residential letting agents to hold CMP,' explains Bill McClintock, chairman of the TPO operating company who is circulating a consultation document to members.

Keeping adequate records can make all the difference whether or not an estate agent fails to counter a complaint made to The Property Ombudsman.

In his first Interim Report of 2012, the Ombudsman, Christopher Hamer, directs his attention to the industry and specifically focuses on how property transactions are recorded.

Complaint

The Complainant was a successful Seller who wanted the Agent to reduce their commission fee (which he had withheld up to the point of my Review) as he considered that the service he had received had not warranted it. The Seller raised issues about viewings (saying that the Agent had left the Property unlocked on four occasions), a lack of updates and feedback, marketing costs and bias towards the Buyers. The Agent acknowledged that during one viewing a staff member had left a patio door unlocked, but had apologised profusely for their error.

Complaint

The Potential Sellers complained that the Agent had not made appropriate efforts to market the Property and that they had not received any contact from the Agent for over eight months to discuss the marketing strategy. The Agent disputed the Potential Sellers’ claims and referred to their progress notes to support their position.

Complaint

The Property had been on the market with the Agent for one year after which the Seller
informed the Agent that they had replaced the laminate floor covering in one of the bedrooms and requested that the particulars be amended the Particulars within a reasonable time, the Seller raised a formal complaint asserting that the Agent’s shortcomings had prevented the sale of the Property.

Complaint

Following their offer being rejected, the Potential Buyers alleged that the Agent had advised them that the Property was not under offer at the time they viewed, when a sale had actually been agreed to another party. The Potential Buyers also raised issues concerning the manner in which the Agent had dealt with their subsequent complaint.

Complaint

Upon being presented with the Agent’s invoice after successfully proceeding to exchange of
contracts on the Property, the Sellers raised a number of complaints in which they stated that the original Agency Agreement was incorrect and that, as they had not signed the document, there was no agreement in place which meant that the Agent was not entitled to charge them a fee. The Agent maintained that, as they had introduced a buyer who had gone on to purchase the Property, they were entitled to a commission fee.

Complaint

The Sellers, complained that, as the housing market had been so quiet, they had suspended
the marketing of the Property but had reached an understanding with the Agent that they should still keep the Property in mind if any potential buyers showed an interest in similar properties. The Sellers believed this had terminated their agreement with the Agent. However, six months later the Agent called the Sellers to arrange a viewing which
resulted in an offer and the Property being sold. The Sellers claimed that due to the lack of active marketing, they should be given a reduction in the commission fee. They also complained that the Agent had not passed information on to the Buyer as they had requested and failed to record and pass information on to their staff, leading to the Sellers
being unnecessarily inconvenienced during the transaction.

Complaint

The Landlords complained that the Agent had not given adequate notice of the Tenant’s
intention to vacate the property, that they had not chased up rent arrears and that they had
failed to adequately respond to their subsequent Complaint. The Agent responded by stating
that the Landlords were already aware of the Tenant having given notice and referred to the
contemporaneous progress notes on their file to support their view.

Complaint

The Landlord had instructed the Agent to find a tenant which they did. After approximately three months the Tenant stopped paying the rent. The Landlord served a Section 8 Notice on the Tenant who vacated the Property with rent arrears of more than £1,500. The landlord accepted that the Tenant was responsible for paying the rent but after conducting some research she was concerned that the Tenant had passed the Agent’s reference criteria.

Complaint

The Landlords had instructed the Agent to let and manage the Property for a period of more than 19 months. However, following the Tenants vacating the Property, the Landlords subsequently spent £1,500 repairing damage caused by prolonged misuse and a lack of care and cleaning by the Tenants. They claimed on the deposit and sought the balance of their losses from the Agent.

Complaint

The Landlords complained that the Agent had not obtained their consent before they let the Property to the Tenant at a rent that was somewhat below the amount advertised. The Agent stated that they had obtained the Landlords’ consent, prior to the letting, during a telephone conversation.

Complaint
The Landlord complained about the Agent’s failure to carry out inspections, arrange for
appropriate remedial works to be undertaken and to communicate effectively with her throughout the Tenancy. The Landlord also blamed the Agent’s management for the poor condition that the Property was left in at the end of the Tenancy and the costs incurred by her to return the Property to a satisfactory condition.

Lettings agents across the UK are continuing to show their support for The Property Ombudsman scheme (TPO), with more than 300 offices joining this year to take the total past 9,000.

'The Government continues to ignore pleas for residential letting agents to be regulated in the same way as sales agents, which we believe would raise standards across the industry,' says Gerry Fitzjohn, chief operating officer of TPO.

Complaint

Miss E (the Prospective Tenant) claimed that the failure of the Agent to advertise the property correctly and to represent both her and the landlord properly caused her to withdraw from the tenancy. Miss E requested a full refund of the £1,000 she paid to the Agent to ‘hold’ the property. The Agent responded stating that the property had been advertised correctly, that the monies represented a ‘fee of intent’ (not a holding deposit) and that, as she had withdrawn from the transaction, her payment would not be returned.