A Code of Practice for Estate Agents.

I am sure most of you will be aware that Chartered Surveyors belong to the Royal Institution of Chartered Surveyors, generally shortened to the “RICS” for ease and economy of English use. The RICS have overall responsibility for regulating the activities that Chartered Surveyors and Estate Agents get up to, and the rules issued by them are all encompassing regarding the property profession. This month, they have just updated what is known as “The Blue Book” otherwise known as the RICS UK Residential Property Standards Manual.

The aim of the manual is to ensure clients and customers have a clear understanding of the scope and quality of the services they can expect to receive from Estate Agents and to help improve standards in the sector by raising public and professional awareness.  A further objective is to encourage agents working within the profession to aspire to the highest standards of service achieved by putting their staff through training and development, whether this training be completed “in house” or by the attendance of external training courses.

The Blue Book however is for guidance, and Estate Agents are free to depart form the regulations laid down, but if there is a subsequent complaint about the level of service that they have given to a member of the public, which has resulted in a financial loss, then they must be prepared to defend their decision to depart from the guide lines as set out in the Blue Book. Not all Estate Agents are members of the RICS, and it is hoped that the Blue Book will act as a useful resource for guidance on how to operate with best practice.

Not many members of the public know what to expect from an Estate Agent. In an article published by Christina Hirst in the RICS Residential Journal, there are 12 global core principals laid down for guidance to Estate Agents. There are as follows:-

Estate Agents should conduct Business in an honest, fair, transparent and professional manner,

They should carry out work with due skill, care, and diligence, and ensure that the staff employed have the necessary skills to carry out their tasks,

They should ensure that their clients are provided with their terms of business, which should be fair and clear, incorporate details of their complaints handling procedure and where possible, an appropriate redress scheme, and meet all other legal requirements and relevant codes of practice.

Agents should do their utmost to avoid conflicts of interest and where they do arise, deal with them openly and fairly.

Agents should never discriminate unfairly in any of their dealings.

Agents should always ensure that their communications are fair, clear and timely whilst being transparent in all dealings with their clients.

They should ensure all their advertising and marketing material is honest, decent and truthful.

Agents should always ensure that any client monies are held separately and be covered by adequate insurance against loss.

Agents trading within the property profession must have appropriate professional indemnity errors or omissions insurance, to ensure that their clients will not suffer loss as a result of any negligent act.

Agents should ensure that they make clear the scope of their obligations to all parties for whom they are acting.

They should give a realistic assessment of the likely selling, buying or rental price or associated cost of occupancy to the client based on market evidence and using best professional judgement.

And lastly, Agents should ensure that all property viewings are carried out in accordance with the client’s wishes and have due regard for security and the personal safety of all parties.

The core principals are really common sense, and set down the minimum standards one would expect to see from and Estate Agent.  One of the most important principals is the 11th one, which relates to Valuations. In my view this is key to being a successful agent.  If you are calling an agent out to value your house, don’t be afraid to ask the Valuer how he obtains his figure, and request details for comparable transactions used in the preparation of the valuation. 

Transparency is essential, and if the selling price is right, then there is a very good chance that you will sell your property in a realistic time frame. If you get few viewings, and the property has been on the market for a year or more, then the asking price is incorrect. All that happens is that the property becomes market stale, and the price drops, as people ask “what’s wrong with the property”.  Normally you will end up with a greater fall in the price, than if you were to sell it at the correct price in the first instance.  Don’t always go for the Agent who values the highest, because quite often they will value high to gain the initial instruction, and then manage your instructions downwards until they can find an applicant willing to buy.  Quite often this practice can lead to a lower selling price than you might reasonably expect to achieve if the Agent had got it right in the first place.  

New and expanded this time in the Blue Book are a raft of regulations covering the actions of residential managing agents. Chapter 7 covers the management of individual properties, Chapter 8 covers Agents who manage whole blocks of property.  The whole area of management is potentially complicated, and the Blue Book seeks to compliment the “service charge management code” which is an approved code of practice under Section 87 of the Leasehold reform, Housing and Urban development Act 1993, which again Managing Agents are expected to comply with

Property is complicated, and it does have many pitfalls for the unwary, it is essential that if you are handling property, whether it be for purchase or sale, rent or management, you take proper advice before embarking on the project.  Always talk to a professional, they are normally very free with their advice, and 10 minutes with the right person may save you many thousands of pounds in the long run, as hopefully you will avoid some of the pitfalls waiting to catch the unwary.

If you want further details on the Blue Book, look on www.rics.org/codesofpractice , you should be able to find further details of the regulations governing the actions of chartered surveyors and other property professionals.

This is an original article by Tony Rowland. The Property Doctor or Timothy Lea and Griffiths Estate Agents, Evesham.