The Property Ombudsman scheme has provided a supplementary membership guidance note to assist letting agents in understanding their obligations under the revised Codes of Practice. This move has come to ensure compliance with the Competition Act.
Approved by the Chartered Trading Act, the revised codes came into effect on the 1st October.
‘As part of the most recent Codes of Practice review process, we have produced further guidance in collaboration with the Competition and Markets Authority (CMA) to help support TPO members and improve standards within the industry,’ said Christopher Hamer, the Property Ombudsman. ‘This guidance note supplements section 3 of the TPO Code of Practice for Residential Estate Agents and has been drafted with the aim of ensuring agents do not compromise honesty in relation to the advertising of fees.’
‘These guidelines come as a result of a well reported case that happened earlier this year where the CMA found that an association of estate agents and a newspaper publisher had entered into an illegal anti-competitive arrangement, breaking the competition. CMA imposed penalties of over £735,000,’ Hamer continued.
Property Ombudsman offers competition law guidance
Ann Pope, CMA Senior Director of Antitrust Enforcement, added that, ’it is clear that some agents are still unclear how competition law applies to their business which is why we wanted this guidance to be disseminated widely. We wanted to assist agents and help the industry understand their responsibilities and what is seen as inappropriate practice.’
‘In particular, we wanted to highlight that the ability of agents to advertise their fees or discounts freely plays an important role in stimulating price competition between competitors. If agents are prevented from advertising their fees or discounts in the media fee levels may be artificially inflated and owners are likely to find it harder to assess which agents offer the best value for money. It could also make it harder for new entrants to enter the market and compete effectively with established agents. Agents that continue to restrict their advertising of fees or discounts in this way are breaking the law and may face severe consequences,’ Pope added.