Estate Agents need compulsory licensing

With the Consumers, Estate Agents and Redress Bill being considered in the House of Lords on Tuesday 30th January 2007, shortly before progressing to the House of Commons to be debated, Halifax Estate Agents (HEA) is calling for the government to go even further.

Halifax Estate Agents is calling for:

The licensing of all estate agents through approved bodies, including existing professional institutions
Minimum training and competency standards
A summary box on all agency agreements to improve customer clarity and choice: HEA will be the first estate agency to introduce this in England and Wales from the beginning of this year
New national quality standards to be defined through consultation

The current bill

Following the Queen's speech (14th November 2006), the Government outlined new legislation to improve the regulation of estate agents. As part of the Consumers, Estate Agents and Redress Bill the DTI announced plans for all estate agents to belong to an independent ombudsman with the power to award compensation to buyers and sellers. This also included a proposal to ban any agent from operating who refuses to join. HEA welcomes this move and urges the government to consider the introduction of compulsory licensing.

Currently by law:

Estate agents have to comply with the Estate Agents Act 1979 and the Property Misdescriptions Act 1991 when they act for people who are buying or selling property.
A conviction for making a false or misleading statement can lead to a fine of up to £5,000 in a Magistrates' Court or an unlimited fine in a Crown Court.
The OFT can prohibit offenders from engaging in some or all types of estate agency work; complaints about estate agents can also be handled by Trading Standards.
The Ombudsman for Estate Agents (OEA) offers consumers compensation of up to £25,000 if their complaint against a member agent is upheld.

Compulsory licensing and membership of independent ombudsman scheme

Almost six in ten people (58%) think there should be a compulsory licensing scheme; even more (64%) agreed with the Government and think there should be a compulsory ombudsman scheme.

In order for any potential licensing scheme to work it is important to have defined training and competency standards. HEA already operates an in-house training scheme called which mirrors the National Association of Estate Agents qualification closely. Once staff have completed this they are encouraged to progress to take the NAEA Certificate and Diploma exams.

HEA is keen for industry representatives, consumer bodies and Government policy makers to consult with the aim of recommending a single set of defined quality standards.

To reinforce its call for compulsory licensing, Halifax Estate Agents has committed to working towards having at least one NAEA qualified colleague in each of its 330 branches by the end of 2007.

Summary boxes on agency agreements

HEA is also calling for all estate agents to sign up to its new summary box initiative. HEA research shows that almost eight out of ten of people (79%) think there should be a standard format for 'important information' when dealing with estate agents.

No standard format exists across the industry for presenting information such as cancellation terms, fees and agreement type. HEA research shows that 73% of respondents favour a summary box style edition on estate agency literature to show key facts.

HEA Agents in England and Wales began introducing the new style summary boxes on agency agreements on a phased basis at the beginning of 2007 and will be campaigning for the rest of the industry to follow suit. Regardless of the size of estate agency, summary boxes are an inexpensive way to improve clarity and the level of service customers receive.

Colin Kemp, Managing Director, Halifax Estate Agents, comments: "Our research shows there is real public support for the proposed Government scheme of compulsory membership of an ombudsman. The public would also welcome an extension of this with the introduction of compulsory licensing."

"Although most estate agents give customers all the information they require, it is often split over multiple documents or pages making it difficult to compare. Our new summary box initiative will introduce a standard format across the industry, giving consumers a consistent means of looking at key information."