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March TPO Member Newsletter 

Dear Member, 
Welcome to our March newsletter. You will, by now, have seen lots of information about our upcoming conference on 10th July 2019, but we're pleased to confirm that we also now have Kevin Hollinrake MP joining our expert panel. 
You will also find useful information on Money Shield, which has secured government approval as a CMP scheme, our latest guidance on Dual Fees and NTSEAT's latest guidance on Referral Fees. 

<span style="text-align: center; display: block; width: 100%;">*CONFERENCE NEWS*<br /><br /></span><strong><span style="text-align: center; display: block; width: 100%;">Kevin Hollinrake, founder of Hunters estate agency and now Conservative MP, joins panel of experts</span></strong>

Kevin Hollinrake, former estate agent and now Conservative MP for Thirsk and Malton, has been announced as the final member of the ‘panel of experts’ due to participate in, what is likely to be, a lively panel debate at The Property Ombudsman Conference on 10th July 2019.

Kevin represents the constituency where he was born and brought up and now lives with his wife and four children. He was elected to Parliament in May 2015 and holds the position of Parliamentary Private Secretary to DEFRA Secretary of State, Michael Gove.  He serves on the Housing, Communities and Local Government Select Committee.

After studying physics at Sheffield Hallam University, Kevin joined Prudential as a branch manager which, at the time, was the largest estate agency in Britain. Discovering he enjoyed the fast moving and challenging nature of the business, five years later, in 1992, he and his original founding partner, John Waterhouse, started Hunters in Goodramgate.

He comments: "It was a tough time to start. Two months after opening our doors, we were hit by Black Wednesday when in one day interest rates went from ten per cent to 15 per cent. But we worked very hard and true to our name, hunted down every deal and we prayed that the market would improve. Eventually it did and we never looked back."

Today, Kevin remains Chairman of Hunters Estate Agents, which floated on the stock market in 2015 and is now one of the largest independent networks of sales and letting agents in the UK with over 200 branches nationwide, gross turnover in excess of £40m and approximately 1000 people employed throughout the network.

Commenting on his appointment to the TPO Conference panel of experts, Michael Stoop, Chair of TPO's Industry Forum, comments: “Never more so than today are agents looking at what’s on the horizon and wondering exactly how it might affect their business. As someone who has been riding the waves of the property market for more than 30 years, and as a strong advocate of the small business sector, we are delighted to welcome Kevin’s expertise and experience to the panel.”

Kevin Hollinrake MP, will also be joined on the panel by:- 

  • Lord Richard Best, OBE DL, Chair of MHCLG’s Regulation of Property Agents Working Group
  • Mark Prisk, Former Housing Minister and MP for Hertford and Stortford
  • Theresa Wallace, Head of Customer Service and Compliance for Savills
  • Kate Faulkner, Property Market Analyst/Commentator and Managing Director of Designs on Property
To book tickets for the TPO Conference on 10th July 2019, CLICK HERE

<span style="text-align: center; display: block; width: 100%; font-weight: bold; color: #414042;">National Trading Standards Estate Agency Team’s industry guidance on referral fees</span>

National Trading Standards has published new guidance on referral fees received by estate agents across the UK, which will make previously hidden fees open and transparent to consumers.

The new guidance was produced by the NTS Estate Agency Team with assistance from The Property Ombudsman, NAEA Propertymark, the Royal Institution of Chartered Surveyors, the Guild of Property Professionals and the Property Redress Scheme.

The NTS Estate Agency Team guidance concludes that referral fees for connected services are permissible, but in accordance with the Consumer Protection from Unfair Trading Regulations 2008, should be disclosed by agents to sellers and buyers where relevant. The guidance also includes a number of examples as well as a model form that agents should use to provide the fee information to consumers.

National Trading Standards are due to report to Ministers on agent compliance with its guidance after monitoring the market for the next 12 months. Ministers have confirmed that a ban on referrals fees remains on the table and will be considered against the results of the monitoring.

The guidance on ‘transparency of fees’ can be found here.

Mark McLaren, Chair of TPO’s Consumer Forum and Non-Executive Board Member commented:

“It is important for both buyers and sellers to be aware of the true cost of any service being recommended by estate agents. Whether this is relates to conveyancing, removal firms or producing Energy Performance Certificates, clearly disclosing the benefit that the agent will receive at the earliest possible stage is the right thing to do. By providing this important information, consumers can compare the services on offer and make an informed decision.”

The NTS Estate Agency team have advised that agents who need further advice should contact their professional body or trade association and that members of the public should raise any concerns about referral fees not being disclosed to Citizen’s Advice on 03454 04 05 06.

<span style="text-align: center; display: block; width: 100%; font-weight: bold; color: #414042;">Money Shield Secures Formal Government Approval as a CMP Scheme</span>

Money Shield, jointly owned by Propertymark and The Dispute Service (TDS), and launched in association with The Property Ombudsman (TPO) in August 2018, has now received formal approval from the Housing Minister, Heather Wheeler MP, to operate a Government-authorised Client Money Protection (CMP) Scheme.

The law now requires all property agents in the private rented sector to be members of an approved CMP scheme by 1st April 2019.

At £400 per firm and available to all letting and estate agents, Money Shield is a straight forward and cost-effective solution, allowing agents to offer their clients protection and reassurance without needing to join a professional body.

Spokespeople from Money Shield, Propertymark, TDS and TPO said: “In the past, landlords and tenants alike have fallen victim to rogue agents misappropriating their money. However, from 1st April, all agents must be enrolled in a CMP scheme and consumers can rest assured that their money will be protected. We’re delighted our scheme has secured formal Government approval, and we encourage any agents who have not yet secured CMP to join Money Shield before the deadline in just under five weeks’ time.”

For more information CLICK HERE or visit 

<span style="color: #414042; text-decoration: none;"><span style="text-align: center; display: block; width: 100%; font-weight: bold;">TPO </span><span style="text-align: center; display: block; width: 100%; font-weight: bold;">Issues Guidance </span><span style="text-align: center; display: block; width: 100%; font-weight: bold;">to Agents on</span><span style="text-align: center; display: block; width: 100%; font-weight: bold;">Dual Fees</span></span>

Disputes over Dual Fees, where two estate agents have been instructed and both are claiming a fee for selling a property, have always been a regular cause of complaint to The Property Ombudsman (TPO). Following TPO’s latest Industry and Consumer Forum meetings on 27th February 2019, TPO has issued clear guidance to agents. Updated Codes of Practice, underpinning the guidance, will follow in due course.

Key Points – The definition of effective introduction

There are two scenarios that are generally presented: 

  1. One agent is instructed on a Sole agency/Sole Selling Rights basis, dis-instructed and a second agent instructed.
  2. Both agents are instructed on a multi-agency instruction.

To provide clarity and certainty to both industry and consumers, there is a need to define what will constitute an effective introduction; the current lack of clarity in this area and lack of definition of introduction is at the root of the disputes.  The disputes reflect poorly on the industry and lead to consumer distress.

TPO has taken on board feedback from agents who consider that sharing a fee allows the second agent to ‘take a punt’ and, instead of referring a sale back, continue with the sale in the hope of receiving at least part of the fee.  TPO’s view is that in dual fee cases the agent who effectively introduced the buyer should be the agent who is entitled to the fee. 

An effective introduction must evidence that the agent carried out an act that initiated the buyer’s reaction to the property.  As such, there is a need for a defined transaction event to occur.  It is TPO’s view that this can be most clearly evidenced by an agent carrying out a viewing. 

When considering if an agent has introduced the buyer, TPO expects to see:

  • Evidence that the viewing has been booked, confirmed in writing to both seller and buyer and taken place. In this way, TPO will be in a position to state that, following the viewing, the agent that conducted the viewing introduced the buyer.

A viewing more than 6 months prior to dis-instruction without evidence of continuity of interest will not be deemed an effective introduction by the first agent to any subsequent sale post dis-instruction. 

The guidance issued by TPO outlines agent obligations upon dis-instruction, including disclosing to the seller a list of parties that they have introduced i.e. a list of those who have viewed the property.  If the seller signed a sole selling rights agreement, the agent must advise the seller on dis-instruction, in writing, that a fee will be due if any party who was introduced during the sole selling rights period proceeds to exchange of contracts.

TPO considers all agents have a specific responsibility NOT to put a consumer at risk of paying two fees and have therefore also outlined the obligations of the second agent upon instruction.  The guidance clearly states that:

“All agents should keep full written records of all communications with both the seller and interested parties and note the advice provided and provide that evidence to TPO should a dispute arise.”

If these steps are followed, the seller will be fully advised and aware of the implications.

Katrine Sporle, Property Ombudsman, comments:

“If a dual fee complaint is referred to TPO, we will be looking to address any consumer detriment.  Our stance is that no consumer should unknowingly be placed in a position of paying more than one commission fee. 

TPO will reach a conclusion against the requirements of the Code of Practice and associated TPO Guidance, having taken into account the contractual entitlement of the agent under the terms of the agreement signed by the consumer.  To establish an effective introduction, there must be a viewing of the property.”

TPO awards are limited, under the Terms of Reference, to £25,000.  If the commission fee in dispute is greater than £25,000 the matter will be outside Terms of Reference.  In such cases, the matter may, with the agreement of all parties, be referred to TPO’s associated mediation service, the Mediator Network,

Michael Stoop, Chair of TPO Industry Forum, says:

“Disputes over Dual Fees have become an increasing cause for concern, prompting the issue to be raised at the Industry and Consumer Fora.  It is clear that in many cases consumers are not aware of the risk. TPO’s guidance and revised Codes of Practice outline the key issue of what constitutes ‘effective instruction’.  It also defines the responsibility of the first agent to provide the seller with the list of viewers, and the second agent to advise the seller of the risk of a dual fee. Through the Industry Forum, the guidance has full backing and is considered best practice.”

Mark McLaren, Chair of TPO Consumer Forum, added:

“Consumers are often the losers in dual fee disputes so it is very welcome news to see new guidance and changes to the TPO Codes of Practice that should help avoid disputes that unfairly affect consumers.”