NOVA NEWS EDITORIAL MARCH 2019
AGENTS REFERRAL FEES
The National Association of Estate Agents NAEA Propertymark has been calling for guidance which is easy for both agents and consumers to be able to understand, and perhaps more importantly, to comply with. It is essential for buyers and sellers of property that referral fees are fully disclosed in order that any fee or commission that the agent will earn is qualified.
The Trading Standards Authority has recently issued guidelines to agents relating to the declaration of fees to clients and this encompasses the Consumer Protection from Unfair Trading Regulations 2008.
Estate Agents will now have to absorb and understand these guidelines to ensure that they comply with requirements. It is important that you, as a consumer, are able to understand.
The guidelines briefly state that an agent should declare in clear terms where they may gain a fee in relation to any of the following:
1. (a) The price of its services, including any “compulsory” extras: and
2. (b) Where a referral arrangement exists, that it exists, and with whom; and
3. (c) Where a transaction-specific referral fee is to be paid, its amount; and
4. (d) Where a referral retainer exists; an estimate of the annual value of that retainer to the estate agent or its value per transaction; and
5. (e) Where the referral is rewarded other than by payment, an assessment of the annual value of the reward per transaction.
This declaration must be made in writing to buyers and sellers in a clear, intelligible and unambiguous manner. The failure, by an agent to disclose referral arrangements may render them liable to criminal prosecution or action for warning or prohibition from trading. The full document relating to referral fees can be viewed through the “Trading Standards Guidance on Transparency of fees involving Property Sales”.
The NAEA says that it is now up to selling agents to absorb the contents of the guidance and ensure that they are complying. It is most important that, for property transactions, the process is seen to be completely transparent. Wording within documentation should be clear and any information given to the customer upfront. It is vital that customers understand that they have a choice in respect of financial and legal services and any other referred service that they may wish to use. All information must be clearly explained within sales particulars and in the agent’s terms of business when the sale is arranged and should also be outlined on the agent’s website.
AGENTS REFERRAL FEES
The National Association of Estate Agents NAEA Propertymark has been calling for guidance which is easy for both agents and consumers to be able to understand, and perhaps more importantly, to comply with. It is essential for buyers and sellers of property that referral fees are fully disclosed in order that any fee or commission that the agent will earn is qualified.
The Trading Standards Authority has recently issued guidelines to agents relating to the declaration of fees to clients and this encompasses the Consumer Protection from Unfair Trading Regulations 2008.
Estate Agents will now have to absorb and understand these guidelines to ensure that they comply with requirements. It is important that you, as a consumer, are able to understand.
The guidelines briefly state that an agent should declare in clear terms where they may gain a fee in relation to any of the following:
1. (a) The price of its services, including any “compulsory” extras: and
2. (b) Where a referral arrangement exists, that it exists, and with whom; and
3. (c) Where a transaction-specific referral fee is to be paid, its amount; and
4. (d) Where a referral retainer exists; an estimate of the annual value of that retainer to the estate agent or its value per transaction; and
5. (e) Where the referral is rewarded other than by payment, an assessment of the annual value of the reward per transaction.
This declaration must be made in writing to buyers and sellers in a clear, intelligible and unambiguous manner. The failure, by an agent to disclose referral arrangements may render them liable to criminal prosecution or action for warning or prohibition from trading. The full document relating to referral fees can be viewed through the “Trading Standards Guidance on Transparency of fees involving Property Sales”.
The NAEA says that it is now up to selling agents to absorb the contents of the guidance and ensure that they are complying. It is most important that, for property transactions, the process is seen to be completely transparent. Wording within documentation should be clear and any information given to the customer upfront. It is vital that customers understand that they have a choice in respect of financial and legal services and any other referred service that they may wish to use. All information must be clearly explained within sales particulars and in the agent’s terms of business when the sale is arranged and should also be outlined on the agent’s website.