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Advice to estate agents: How to protect yourself from the Consumer Protection Act

It has to be admitted that in the absence of a body of case law on the subject, many estate agents still have no clear ideas on how the courts will interpret the newly legislated Consumer Protection Act when it is applied to property matters.

Many agencies, including my own, are now "playing it safe" and taking precautions not to find themselves on the wrong side of the Act.

But what does playing it safe involve?

It means that the agent has to go through the house with the seller and list, in writing, every defect that they are aware of. Then this has to be shown to the buyer and discussed with him. This "defect list" should be used as an addendum to the agreement and signed by both the buyer and seller.

Any hidden or undisclosed problems, for example, damp patches that might not be that evident in a dry period - and then revealed later - could result in the seller having to pay compensation.

It is important to note that the agent, being part of the "supply chain" in legal terms, could be legally culpable in cases of inadequate disclosure, whereas the seller, home selling not being his daily occupation, could be exonerated.

What happens, however, if a defect was not evident at the time of the inspection or at any stage during the seller's occupation of the home?

In these cases, the old "voetstoots" clause would still apply; however the courts may disagree on this issue, especially if property comes to be seen in the same light as items such as machinery, where latent defects, once detected, will definitely become the responsibility of the distributor and the manufacturer.

The really important point to grasp is that agents must list all the known defects and this list must not only be comprehensive, but completely honest too.


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