Open Letter to The Property Ombudsman – Agents Operating Illegally

Hi Annette, my understanding it that a criteria of becoming a member of an Ombudsman scheme is that an agent must have PI insurance.

Mark why not go straight to Trading Standards - they will investigate a complaint regardless of whether the subject is a member of this scheme or that. I think that you have raised a very important issue and one which is catching would be landlords out all the time.
Ironically you cannot fault a person who wants to become a landlord/property investor and he pays for "training and services" because he know what he does not know. I hate it that these people are trying to do the right thing and are being hoodwinked.

Hello.I was ripped off by a 'property sourcing' company over the course of 18 months between March 2009 and September 2010. The company sourced a property through another company. They took fees for reserving the property, the other company also took a 'third party fee'. I was given the runaround throughout, with the companies constantly making excuses as to why it was taking so long to go through before finally it all collapsed.
I believe this was all done illegally and have complained to both companies but received no response. Would the ombudsman be able to help in such an instance if I gave full details of companies, circumstances, etc? I think both companies are still operating. Thanks.

Hi Anthony

Have you checked to see whether the company you engaged and the one they were working with too are registered with one of the Ombudsman schemes. If they are you should take your complaint the the appropriate Ombudsman. If not, then you should report them to Trading Standards for operating illegally and also copy in The Property Ombudsman.

If you do involve Trading Standards please make them aware of this thread.

Good luck and please keep us informed.

Thank you for spreading the word Vanessa, I have also commented on Property Tribes.

I've shared this thread in numerous LinkedIn and Facebook Groups to spread the word.

I've been banned from some and my post has been deleted from others!

It would seem the truth hurts too much for some group moderators to want their group members to hear it!
Thanks also to @TessaShepperson from Landlord Law for her efforts in respect of sharing and linking back to this thread.

If all Landlords who read this thread were to share it via social media and/or link back to it from other websites that would be an amazing way to spread the word.

Similarly, if anybody reading this has good Press and Media contacts please put them in touch with me - mark@property118.com

Hi Mark. I have just checked the websites of both of these companies. I cannot see any evidence that either are registered with any Ombudsman scheme, so I think I'll have to report them to Trading Standards.

Dear Mark

In answer to your question, Section 2 of the TPO Code of Practice for Residential Estate Agents requires that the figures provided by registered firms following the market appraisal are done so in good faith and must reflect the available information about the property and the current market conditions. In addition, that figure must be supportable by comparables of similar properties. In short, the Code requires that an agent does not deliberately misrepresent the marketing value of a property.

In addition, Paragraphs 5h, 5i, 5j and 5k require that the details of the property particulars are agreed with the client prior to the start of marketing; that advertising must comply with the Consumer Protection from Unfair Trading Regulations 2008 and the Property Misdescription Act 1991; and that adverts are legal, decent, honest and truthful in accordance with the British Codes of Advertising and Sales Promotion and Direct Marketing.

Taken together, these requirements mean that, if a registered agent chooses to us the term ‘instant equity’ and advertise a figure, they must be able to provide appropriate evidence to support such a figure, as well as their client’s agreement to market the property on that basis.

Any disputes relating to registered firms which are referred to my office would be measured against these requirements of the Code of Practice. If a firm was found to be in breach of these obligations then a suitable award may be made. However, each dispute is considered on the circumstances of the individual case, therefore, awards (if appropriate) may vary. If the dispute concerns a valuation provided by a surveyor then the matter should be referred to either the Royal Institute of Chartered Surveyors or Ombudsman Services (previously the Surveyors Ombudsman Scheme).

I must also point out that, regardless of the agent’s marketing, there remains a responsibility on the buyer to ensure that what they are purchasing suits their intended purpose. If the purchase is to be an investment, I would strongly recommend that the buyer obtains an independent survey to check for themselves that the investment is suitable for their needs before such times as they have committed themselves to the purchase. Furthermore, I have seen a number of recent cases where the buyer concerned has not visited the property before deciding to commit themselves to the purchase. By taking the time to visit the property and obtaining an independent report to verify whether the property is suitable for their investments needs, many disputes could be avoided.

Finally, I would reiterate that the agent’s role is to obtain the best possible deal for their client. Where an agent acts for a seller, the buyer must always bear this in mind and take the necessary precautions (by way of instructing independent third parties) to ensure that the property fulfils their specific requirements.

Regards

Christopher J Hamer
Property Ombudsman

Excellent topic. My former business went into the business of 'sourcing' - ie getting motivated sellers to market properties. On researching, it was quite clear that we need to be members of the Property Ombudsman scheme. All properties were marketed at the discounted price agreed with the vendor. So in my opinion, all property sourcers are covered by the Estate Agents Act and need to be members.

The key issue of Ombudsman membership is the need for PI cover and to adhere to Codes of Practice for complaints etc.

Most sourcing companies therefore will completely shy away from joining for these reasons! They get lots of complaints, which will ultimately land on the desk of the Ombudsman.

Sadly, it is not mandatory for letting agents, by we, like many agents are also members of the Ombudsmand Scheme for Lettings. This is actually an Arla requirement.

Just to up-date this thread with the news that I interviewed both the Property Ombudsman and the Chief Ombudsman of Ombudsman Services at the NALS Annual Conference on this subject.

You can view the videos here:

http://www.propertytribes.com/what-property-ombudsmen-have-say-about-deal-sourcers-t-6493.html#pid81228

They both said that it was black and white that deal sourcers fall under the Estate Agent Act and need to be registered with an Ombudsman Scheme.

Thanks Mark for this excellent initiative. Dishonest operators have been fleecing the unwary this way for far too long. I used to spend time outing them, but the reality is there seems to be a never-ending supply of gullible people desperate to thrust money into their clutches. I've got limited time and frankly I've run out of patience, so it's really good to know there is an official body to send dodgy-sourcer spam to and laws in place to deal with them. Probably Mr Hamer will need to hire an assistant!