The Hidden Truth: Property Issues Agents Will Soon Be Required to Disclose

The Consumer Protection from Unfair Trading Regulations 2008 has always mandated estate and letting agents to dutifully provide material information in property listings. 

However, the consistency of disclosure practices across the industry leaves much to be desired.

So, what is 'material information'? It extends beyond traditional elements like sale or rental price, number of bedrooms, or tenure information. It now includes contemporary factors such as broadband speed and the availability of renewable or alternative energy sources.

The initial step for most potential homeowners or tenants—often one of the biggest purchasing decisions they'll make in their lifetime—starts with an online search on property portals. However, many discover crucial material information only after entering into a property transaction. The aftermath? Emotional and financial distress.

This autumn, the industry regulator plans to introduce the latest material information rules. James Munro, head of the National Trading Standards Estate and Letting Agency Team (NTSELAT), announced this at the Propertymark One Conference. 

Under Part A of the Trading Standards’ reform, which came into effect in June 2022, agency listings have been required to display material information such as leasehold terms, council tax information, and price.

The next stages of the material information rules, Parts B and C, are poised to further refine disclosure requirements. Part B mandates the disclosure of all property-related information, particularly non-standard features that might affect a potential buyer's interest in the property. Part C focuses on additional material information, applicable to properties affected by the issue itself, like the property's location.

In a Bold Group Podcast, Mr Munro highlighted that these additional requirements will be introduced this autumn. He stressed the importance of not confusing upfront initiatives with the requirements of these new rules. These changes, according to him, are more about reporting adverse facts about the legal title and environmental factors, such as flooding.

Once all three phases are complete which is likely to happen this Autumn, National Trading Standards wants all material information to be mandatory on property listings. Agents will then be required to include all the necessary information before listing a property on a portal.

The impact of these new disclosure requirements remains to be seen, particularly in relation to the advocacy work of organisations like The Home Buying and Selling, which champion upfront information.

David Pett from MJP Conveyancing, a national conveyancing provider, believes these changes will foster a closer working relationship between conveyancers and estate agents. Before listing a property, an agent may need to obtain a report from a conveyancer on the legal title to check for any adverse elements. The listing will need to highlight the defect, marking a significant change for many agents.

Indeed, the property industry is set for a game-changing shift. How agents adapt to these new regulations will no doubt shape their future success in the industry.