Do estate agents have to disclose problems?

[Deleted User]

If an estate agent is marketing a property for sale and they know it has a significant structural problem, are they obliged to disclose this to buyers putting in an offer? Or is it okay for them to wait for the survey to pick it up? I'm talking something that could cost £10-20k to fix.

I'm aware of a case in which the estate agent is encouraging the vendor to hide any evidence of the problem, which suggests to me that maybe the agent isn't telling potential buyers about it.

Obviously from a practical point of view it would be stupid for the agent not to tell people, as they risk wasting time and money accepting offers from people who may well pull out when they discover the problem.

I'm just wondering if there is any law or any code of conduct to which agents are (or should be) signed up, which would oblige them to disclose this sort of thing?

Thanks in advance.

ihatemyhouse

buyer beware, that is why you have a survey

Thrugelmir

EA's only get paid when the house sells. So there's nothing to be gained. Vendors are the ones to conceal the facts.

[Deleted User]

Hmm, in this case the vendor claims the estate agent told them to cover up the problem. I suspect either the vendor is telling porkies or the estate agent is an idiot. Or both.

Debt_Free_Chick

My understanding is that neither the EA nor the seller have to volunteer anything. If asked directly, then the seller has to be honest - I'm not sure about the EA, but it stands to reason that they must also disclose if - IF - they really do know.

This disclosure is usually what the solicitor undertakes via the property information form, completed by the seller. As that's a formal, signed, legal document it carries the most weight. The EA is not involved in the completion or signature of the Property Information Form.

I'm aware of a case in which the estate agent is encouraging the vendor to hide any evidence of the problem, which suggests to me that maybe the agent isn't telling potential buyers about it.

For the purpose of marketing the property, this may well be legal and I rather suspect it is. However, when completing the Property Information Form, the seller must be honest. Once the buyer sees the Form, they may well walk away.

As others have said, any buyer should get their own appraisal of the property, in any event.

Yorkie1

I have at the back of my mind something about a recent case where the EA was held liable for misdescription for continuing to conceal a structural issue once they were on formal notice about it.

Hopefully someone else can remember for me (one way or another!).

moneyistooshorttomention

It is a very recent thing, but I understand EA's ARE supposed to disclose any material facts they know. Not sure if that's a legal requirement or a "code of conduct". However, one local EA here did tell me various (bad) facts about a house here and told me they had to do so because they knew of them.

I suspect most EA's take the view that they try very hard "not to know" about any bad points on the house. Certainly, it must have been very hard for the EA that persuaded me into being taken to view a house I hadn't decided to see to escape knowing the catalogue of problems that particular house had (and I rather suspect they must have known, in order to make a special effort to persuade the "non-local" to go and have a look at that particular dump). Flooding risk/several possible boundary disputes/a back garden that looked like it might "go on the slide" and was certainly difficult to work. All round, no chance the EA wouldn't have been able to work out the problems with that house for themselves at first glance, even if they hadn't been told of them. But one set of "virtual blinkers" donned and they could pretend not to "know".

David_Stuart-Smith

[Deleted User] wrote:

If an estate agent is marketing a property for sale and they know it has a significant structural problem, are they obliged to disclose this to buyers putting in an offer? Or is it okay for them to wait for the survey to pick it up? I'm talking something that could cost £10-20k to fix.

I'm aware of a case in which the estate agent is encouraging the vendor to hide any evidence of the problem, which suggests to me that maybe the agent isn't telling potential buyers about it.

Obviously from a practical point of view it would be stupid for the agent not to tell people, as they risk wasting time and money accepting offers from people who may well pull out when they discover the problem.

I'm just wondering if there is any law or any code of conduct to which agents are (or should be) signed up, which would oblige them to disclose this sort of thing?

Thanks in advance.

[/QUOInterestingly ever since the introduction of The Property Misdescriptions' Act in 1991 Estate Agents changed from their age old habits of being verbose and hyperbolic to being scant with the provision of information. This was because the Act forbade the telling of untruths. Hence agents adopted the policy of "If in doubt - leave it out". This legally permitted silence was then common practice until around Setember 2012 when the Office of Fair Trading announced that the Property Misdescriptions' Act was to be repealed in 2013 and that instead Agents would be governed by other legislation (The Consumer Protection Regulations) which surprisingly had been in place but not applied by Trading Standards since 2008 ! That legislation effectively directly contradicts the practical effect of the Property Misdescriptions' Act in that the Property Misdescriptions' Act REQUIRED "disclosure of any material issues to a property which might affect the transactional decision making of an interested party". Such a requirement is totally different from The Property Misdescriptions' Act and its encouragement of silence. Hence agents are now legally bound to declare all sorts of "material information" of which they have knowledge (or may reasonably have been expected to have knowledge) and which might affect the decision making of a would-be buyer. Such information has to be declared "at the earliest possible moment" and which should be done to prevent inconvenience, wasted time and/or wasted cost. The long-standing legal principle of Caveat Emptor has therefore been removed by the CPRs and the consumer is now protected in a state of relative ignorance.TE]