Mr and Mrs I, the buyers, were investors who approached the Agent with a view to buying a rental property suitable for their needs. The Agent duly provided them with the details of the property which included rental values and was being sold with a sitting tenant. Mr and Mrs I proceeded to purchase the property, however, two years later, after being contacted by the local council, Mr and Mrs I complained to Agent that they had neglected to inform them that the property fell under the Council’s selective licensing scheme which, in their opinion had devalued the property.
The Agent argued that the seller had not informed them of the scheme at the point the property was being marketed and, therefore, could not be held liable for the omission. I noted that the local licencing scheme had come into force six months before the property had been marketed by the Agent, yet there was no mention of the scheme’s existence in the sales particulars. Mr and Mrs I also provided documentary evidence substantiating their claim that they were investors and not looking to purchase a property to occupy themselves which could have excluded the property from the licencing arrangements. Furthermore, Mr and Mrs I had obtained confirmation that not only had the local council written to all of the local agents several months before the scheme came into force, but that they had also sent representatives to visit relevant agent offices to explain the details of the scheme.
I rejected the Agent’s view that they were not on notice about the selective licensing scheme and, given their responsibilities to divulge information that was potentially material to the Mr and Mrs I investment decision, should have informed Mr and Mrs I about the scheme but failed to do so. Such a failure did not accord with the Agent’s obligations under Paragraphs 5h and 10b of the TPO Code of Practice and the CPRs, causing Mr and Mrs I aggravation, distress and inconvenience as well as financial expenditure. Accordingly, I made an award of £1,000 in compensation.
In recent years many local authorities have introduced licencing schemes either for rental properties or landlords themselves. It is reasonable for consumers to expect agents to have a good local knowledge and an awareness of the regulations imposed on both local and national levels. Ignorance or choosing to withhold information are not acceptable excuses for failing to disclose important information to consumers.