The Estate Agents (Undesirable Practices) (No. 2) Order 1991

Order made by the Secretary of State, laid before Parliament under section 3(6) of the Estate Agents Act 1979, for approval by resolution of each House of Parliament within 28 days beginning with the day on which it was made, subject to extension for periods of dissolution, prorogation or adjournment for more than 4 days.

Statutory Instruments

1991 No. 1032

ESTATE AGENTS

The Estate Agents (Undesirable Practices) (No. 2) Order 1991

Made

19th April 1991

Laid before Parliament

19th April 1991

Coming into force

29th July 1991

The Secretary of State, after consulting in accordance with section30(1) of the Estate Agents Act 1979(1) the persons therein referred to, in exercise of thepowers conferred on him by section 3(1)(d) of that Act and of all otherpowers enabling him in that behalf, hereby makes the followingOrder:—

Citation, commencement, interpretation and revocation

1.—(1) This Order may be cited as the Estate Agents (Undesirable Practices)(No. 2) Order 1991 and shall come into force on 29th July 1991.

(2) In this Order—

“the Act” means the Estate Agents Act 1979;

“associate” has the meaning given to it in section 32(1) of the Act;

“client” means a person on whose behalf an estate agent acts;

“connected person” in relation to an estate agent means any of the following—

(a)

his employer or principal, or

(b)

any employee or agent of his, or

(c)

any associate of his or of any person mentioned in (a) and (b)above;

“estate agent” means any person who in the course of a business (including one inwhich he is employed) engages in estate agency work and includes caseswhere he is negotiating on his own behalf;

“estate agency work” has the meaning given in section 1(1) of the Act;

“financial benefit” includes commission and any performance related bonus;

“interest in land” means any of the interests referred to in section 2 of the Act andreferences to an

“interest in the land” are references to the particular interest in land of which theestate agent is engaged to secure the disposal or acquisition;

“promptly” means within as short a period as is reasonably practicable in thecircumstances, from the moment when what is to be done can reasonably bedone;

“purchaser” means a person to whom an interest in land is transferred or inwhose favour it is created;

“services” means any service for consideration provided, or to be provided, toa prospective purchaser—

(a)

by an estate agent or a connected person, or (in a case where theestate agent or connected person would derive a financial benefit fromthe provision of the service) by another person, and which

(b)

is such as would ordinarily be made available to a prospective purchaser in connection with his acquisition of an interest in land or his use orenjoyment of it (including the provision to that purchaser of bankingand insurance services and financial assistance and securing thedisposal for that purchaser of an interest in land if that disposal isone which has to be made in order for him to be able to make theacquisition he is proposing or is one which is a result of thatacquisition).

(3) The Estate Agents (Undesirable Practices) Order 1991(2) is hereby revoked.

Undesirable Practices

2.  For the purposes of section 3(1)(d) of the Act the followingpractices in relation to estate agency work are hereby declaredundesirable, that is to say as regards—

(a) the disclosure of a personal interest, any failure to disclose thatinterest as described in Schedule 1 to this Order;

(b) the arrangement and performance of services, any act or omission asdescribed in Schedule 2 to this Order;

(c) other matters in the course of that work, any misdescription oromission of the kind described in Schedule 3 to this Order;

and the provisions of such Schedules shall have effect for supplementing the above paragraphs.

Peter Lilley

Secretary of State

Department of Trade and Industry

19th April 1991

Article 2(a)

SCHEDULE 1 Disclosure of Personal Interest

Failure by an estate agent:

1.  To make disclosure of his personal interest as required by section21(1) of the Act promptly and in writing.

2.  To disclose to his client promptly and in writing that—

(a) he himself has, or is seeking to acquire, a beneficial interest inthe land or in the proceeds of sale of any interest in the land; or

(b) he knows that any connected person has, or is seeking to acquire, abeneficial interest in the land or in the proceeds of sale of anyinterest in the land.

Article 2(b)

SCHEDULE 2 Arrangement and performance of services

1.  Discrimination against a prospective purchaser by an estate agent onthe grounds that that purchaser will not be, or is unlikely to be,accepting services.

2.  In cases where an estate agent has introduced a prospectivepurchaser to his client and that purchaser has made an offer, failure bythe estate agent to forward to his client promptly and in writing at allstages before contracts for the disposal of the interest in the landhave been exchanged, or in Scotland before a contract for the disposalof the interest in the land has been concluded, an accurate list ofservices, provided that—

(a) an application from the prospective purchaser for services has beenreceived by the estate agent or a connected person or (in a case wherethe estate agent or a connected person would derive a financial benefitfrom the provision of the service) by another person; and

(b) the estate agent knows that such application has been received andthat it is an application for services, being services in connectionwith the prospective purchaser’s acquisition of the interest in the landor his use or enjoyment of it, or with his disposal of an interest inland which he has to make in order to make that acquisition or which isthe result of that acquisition; and

(c) that application has not been refused.

In this paragraph“offer” includes a conditional offer and“forward” means despatch to the client by hand, post or fax at the address orto the number given by the client to the estate agent, which despatchmay be made by the person by whom or which the service is being, or isto be, provided.

Article 2(c)

SCHEDULE 3 Other Matters

1.  The making by an estate agent, knowingly or recklessly and orally orin writing, of any misrepresentation—

(a) as to the existence of, or details relating to, any offer for theinterest in the land; or

(b) as to the existence or status of any prospective purchaser of aninterest in the land.

2.  The failure by an estate agent to forward to his client promptly andin writing accurate details (other than those of a description which theclient has indicated in writing he does not wish to receive) of anyoffer the estate agent has received from a prospective purchaser inrespect of an interest in the land.

3.  In this Schedule—

(a) in paragraph 1 a misrepresentation is“recklessly” made if it is made regardless of whether it is true or false,whether or not the estate agent had reasons for believing that it mightbe false;

(b) “offer” in paragraphs 1 and 2 includes any conditional offer, but does notinclude offers of a description which the client has indicated inwriting to the estate agent need not be forwarded to him;

(c) paragraph 1(a) does not affect the right of an auctioneer to bid atan auction in accordance with section 6 of the Sale of Land by AuctionAct 1867(3) or in Scotland any rule of law of like effect;

(d) the“status of any prospective purchaser” in paragraph 1(b) includes the financial standing of that purchaserand his ability to exchange contracts expeditiously or in Scotlandconclude a contract expeditiously;

(e) “forward” in paragraph 2 means despatch to the client by hand, post or fax atthe address or to the number given by the client to the estate agent.

Explanatory Note

(This note is not part of the Order)

Section 3(1)(d) of the Estate Agents Act 1979 confers power on theSecretary of State to declare practices in relation to estate agencywork to be undesirable. When a practice has been so declared theDirector General of Fair Trading can, if satisfied that a person hasengaged in it and is unfit to carry on estate agency work, make an orderprohibiting that person from carrying on estate agency work, either atall or of a description specified.

By this Order certain practices are declared to be undesirable,namely, the failure by an estate agent promptly and in writing todisclose certain interests (article 2(a) and Schedule 1), discriminatoryconduct against purchasers who are not accepting services from the agentor from certain other persons, and the failure to keep clients informedas to such services as have been applied for by prospective purchasers(article 2(b) and Schedule 2), the making of misrepresentations and thefailure promptly and in writing to forward to the client accuratedetails of offers received (article 2(c) and Schedule 3).

(1)

1979 c. 38.

(2)

S.I. 1991/861.

(3)

30 & 31 Vict. c.48.