Regulation of Estate Agents: A Series of Half‐hearted Measures?
| Published date | 01 May 1992 |
| Date | 01 May 1992 |
| Author | Richard J. Bragg |
| DOI | http://doi.org/10.1111/j.1468-2230.1992.tb00917.x |
LEGISLATION
Regulation of Estate Agents: A Series
Half-hearted Measures? of
Richard
J.
Bragg
*
The British public have long been highly dubious of the activities of that body of
persons collectively known as Estate Agents. The business of acting as an agent
for people wishing to sell real property has been a feature of the British market
for many years. The activity, at least
in
the good times, can be very lucrative,
featuring commissions between
1
and
2
per cent of the selling price, plus additional
charges covering most of the actual costs of undertaking the activity.
In
English
law anyone can act as an estate agent. There is no direct requirement for such a
person to have acquired any qualification, nor is there any licensing requirement.
Many agents are, in fact, qualified as surveyors and/or auctioneers, but this is by
no means universal. The organisational structure is as varied as the qualifications
of agents, varying from large corporations down to one-man businesses.
In
the
1980s,
estate agencies were seen as a lucrative investment by building societies and insurance
companies, which bought up many agencies and amalgamated them into large chains
under subsidiary companies. Many small agencies, however, still exist.
It
is clear that in the sale of private houses, consumers are virtually forced to
employ an agent.’ Thus, from a consumer viewpoint, the total honesty and
integrity of the agent are essential features. This is often lacking. The scope for
minor ‘fiddles’ is enormous and the Office of Fair Trading (OFT) has uncovered
evidence of a number of activities of a more seriously fraudulent nature. It is not
surprising to find that estate agents are generally regarded with extreme suspicion
by the public. Their honesty is often the subject of ‘music hall jokes’. Such an
approach is perhaps unfair on some of the corporate agents, although even they
sometimes have difficulty controlling the activities at branch level of some of those
who work for them.
Of course, the general law of agency is applicable to the arrangement. The estate
agent is bound by a contract, express or implied, with specific limits, but in practice
the contract is drafted by the agent, and will contain many terms ill-understood by
the client and usually very much
in
favour of the agent.
Any
deficiencies amounting
to a breach of the agency contract can be enforced by the principal
in
a civil action
for breach of contract. However, the expense and difficulty of civil enforcement,
together with the willingness of agents to appeal as far as the House of Lords on
occasion,* have made it impracticable in most cases to take this step.
With this background, one might expect the sort of comprehensive regulatory
approach of the legislators, as one has seen
in
relation to car salesmen, by the
application of the criminal law3 or the more recent licensing approach
in
relation
*Senior Lecturer
in
Law, University of Manchester; Director of Training and Research, Lace Mawer (Solrs).
I
2
3
The Office
of
Fair Trading has estimated that
well
over
90
per cent do
so.
eg
Sorrel/
v
Finch
[I9761 2 All
ER
731.
In
particular, Trade Descriptions Act 1968,
s
I:
Consumer Protection Act 1987.
s
20; Road Traffic
Act 1988.
s
75.
368
The,
Modem
Law
Review
55:3
May 1992 0026-7961
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