HIPs rules bring massive rise in consumer protection

Consumer protection for people buying and selling residential property in England and Wales receives a massive boost.

The Secretary of State for Trade and Industry has approved the Ombudsman for Estate Agents’ application to run a redress scheme under the Housing Act 2004 in respect of Home Information Packs (HIPs).

From 1 June, all estate agents in England and Wales will be required to join the OEA scheme covering complaints about their conduct with regard to Home Information Packs and offering complainants redress, including the possibility of compensation of up to £25,000, should an estate agent be deemed to have breached relevant rules.

With 17 years’ experience in handling residential property disputes, the OEA already has around 70 per cent of estate agents in England and Wales, the countries covered by the HIPs Regulations, as members of its voluntary jurisdiction.

Following the Order under the Housing Act, every estate agent in England and Wales will be required to join, with the OEA expecting that many will go on to apply for full membership rather than just complying with the minimum legal requirement.

“We spent some considerable effort in building our application to become an approved scheme under the Housing Act. It is a natural development of what we have been doing anyway but we had to prove to the Secretary of State that we had the right structure, skills and ability to control the work. We have been providing redress to consumers of estate agency services for 17 years,” said Mr. Christopher Hamer, who became Ombudsman in December last year.

The OEA will now begin work with the Department for Communities and Local Government (CLG), the Office of Fair Trading (OFT) and other consumer bodies on a campaign to promote awareness of the scheme and will start to register those firms who need to join the HIPs redress scheme.

“The OEA has proved to the DTI and the OFT that it is able to play a major role in Government-backed consumer redress arrangements. In terms of Alternative Dispute Resolution, it is important to focus one industry’s contribution to consumer protection and redress in one area. There is greater consistency for consumers and greater alignment in the standards that the industry has to work to,” added Mr. Hamer.

“All agents in England and Wales will have to work to high professional standards when it comes to HIPs. If they go beyond this to join my scheme as full members they will then adopt the OFT-approved Code of Practice and be able to display to buyers and sellers that such standards cover their full range of business.”

Bill McClintock, chairman of OEA Ltd., which manages the Ombudsman scheme, anticipates that estate agents who are already members of the OEA will incur no extra costs in OEA membership through the HIPs requirements.

“Other agents will be required to pay an annual fee slightly below full OEA membership as the Ombudsman will only be governing their firms’ performance with regard to the HIPs scheme,” he added.

“But I would urge them to pay the little extra that is required to become full OEA members, thereby assuring consumers that they can expect best practice and compliance with the OEA Code of Practice in all areas of their operations.

“We will now conduct a marketing campaign to ensure that those who need to know about HIPs redress - whether buyers, sellers or estate agency firms - are well aware of what is available.”