Material information in property listings

The National Trading Standards Estate and Letting Agency Team has recently released new guidance for material information in property lists for both sales and lettings. The NTSELAT stated that the guidance is intended to support agents with existing requirements under the current consumer protection regulations and therefore the guides are effective immediately, although it is recognised that there will be an implementation period. However, it is envisaged that a failure to provide the minimum information will prevent a property from being listed on property portals. The move from the NTSELAT has been much anticipated. The Consumer Protection from Unfair Trading Regulations 2008 were previously criticised for failing to provide a comprehensive understanding of what amounted to “material information” that needed to be included for consumers when a property is listed. The NTSELAT has sought to address this through its guidance. The guidance further promotes the government’s objective to improve the home buying and selling process by ensuring that buyers have information available to them before even viewing a property and bringing forwards information which may later affect their decision to purchase the property. It is hoped that making this information available to the buyer early on will reduce the number of failed transactions and speed up the conveyancing process. The guidance The release of the guidance has come in two phases. The first (part A), approximately 18 months ago, required property listings to include price, council tax band and details of tenure. This was not a substantial change, and most estate agents already included this information. Since then there has been further guidance – for example, on removing “price on application” listings. However, the new guide represents a more fundamental change which will significantly alter the conveyancing process. Along with part A, the new guide has two further sections (parts B and C). Part B relates to information that is likely to be in the knowledge of the seller or within their abilities to obtain. This includes details of utility supplies, heating and parking. Part C will require specialist advice from a conveyancer. Although the requirement is only to disclose this information when the property is affected by the issue in question, only a conveyancer will be able to make that assessment. If a seller makes no comment on a particular issue, it may be assumed to have made an investigation and the property is not so affected. This change will mean it will soon become best practice for a seller to engage a conveyancer before the property is put on the market. It may also mean that sellers may have to adjust their expectations of how quickly a property can be advertised or viewing commenced. They will also face additional costs, but, in theory, this should ensure a smoother and faster transaction once a buyer has been found. The details required by part C include whether the property is a listed building, is in a conservation area or is subject to a tree preservation order, as well as details of restrictive covenants, rights, planning permissions, restrictions on subletting and use of the property (such as running a business or using it as a holiday let) and, in the case of leasehold properties, covenants and restrictions arising from the lease. Environmental and local land charges searches will need to be completed so that details of flood risk, coastal erosion, coalfield mining and relevant planning permissions can be added to the listing. The seller will also have to include whether the property has been adapted and is suitable for accessibility needs. The implications So, what do we make of this? I believe we are now finding ourselves at a turning point for our conveyancing system. The goals of assisting home buyers in making informed decisions early and avoiding wasted costs are highly commendable. However, consumers themselves have frequently been reluctant to focus on the details once they have found their dream home – as every conveyancer knows. Agents have shown minimal signs of adopting or embracing these changes to date, highlighting perhaps the continued need for better regulation and a more joined-up approach. Shifting the timing of when information is provided, and who collates it, is a task that should not be underestimated by those pushing for the change. Public buy-in, education and a significant mainstream media campaign will be needed to make this work. Whether it will hit the rocks of intransigence and resistance to change, in the same way that home information packs did many years ago, or turn into a commercial opportunity for technology companies and savvy conveyancers is also not clear. What is clear is that the clarification from the NTSELAT as to what constitutes material information and its stated intention to enforce in due course means that the process of buying and selling homes should not be thought of in the same way in 2024 as it has been to date. Although the NTSELAT has taken its time and consulted with agents, conveyancers, surveyors and representatives of consumer groups, a potential criticism is that, without enforcement and regulation of agents, there will be no change and it will be down to the property portals to mandate the extent to which they wish to do so. In the meantime, conscientious agents and other property professionals will be looking at how this change will impact their processes and how they can collaborate between themselves to provide the best service to sellers. Jeremy Raj is head of residential property and Hayley Bruce is a practice development lawyer in the residential property team at Irwin Mitchell Image © Jeff Blackler/Shutterstock