Open Letter to The Property Ombudsman – Agents Operating Illegally

Open Letter to The Property Ombudsman – Agents Operating Illegally

9:47 AM, 7th September 2012, About 9 years ago 23

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Dear Property Ombudsman

I am very concerned about the number of readers letters that I receive from both landlords and vendors of properties who feel they have been ripped off by unscrupulous and unlicensed agents calling themselves “Property Sourcers“.

There is very little I can do about this other than offer sympathy as Property118 is neither an arbitrator nor a regulator.

How landlords are ripped off

These “Property Sourcers” (which sometimes also refer to themselves as “buyers agents, property mentors, property clubs etc.) regularly use the phrase “Instant Equity” or “below market value” in advertisements for investment properties for sale. I am not convinced that many of these deals are even a bargain, let alone how it can be possible to justify advertising properties using such terminology. Surely a property is only worth as much as somebody is prepared to pay and if a vendor could get a better deal they would do so?

If people or businesses claim to act as an agent for a buyer or a seller of a property, my understanding of the Estate Agency Act 1979 is that they are “Estate Agents” regardless of what other fancy title they want to dress up their activities as and should therefore comply with The Estate Agency Act 1979 in terms of registering with an Ombudsman service and satisfying the criteria of membership. I quote a section from the OFT website (in blue text below) which, to my way of thinking, is quite clear on this:-

Who is an estate agent?

By law, you are an estate agent if:

  • you deal with people who want to buy or sell freehold or leasehold property, throughout the UK: this includes commercial and agricultural property
  • you do this as part of a business
  • you act on instructions from a client.
The complaints I most often receive from landlords are:-
  • Wasted valuation and legal fees when mortgage valuations do not match the agents claims on value
  • Agents are not registered with an Ombudsman
  • Agents take reservation fees from purchasers and refuse to refund them if the buyer pulls out of a transaction, even if the results of “due diligence” (such as a mortgage valuations not matching the claims made by the agent) are the reason for not proceeding

My questions to the Ombudsman are:-

  • Does the Ombudsman agree that people or businesses working for a vendor of a property or a purchaser of a property should be registered with an Ombudsman scheme according to the Estate Agency Act 1979?
  • How can people check whether a person or business acting as an Estate Agent is registered?
  • What can be done when a person or business is found to be breaking the law of the Estate Agency Act 1979 in terms of none registration?
  • If readers of Property118 report business offering services such as those described above which are not registered, or which appear to be in breach of the rules, will the Property Ombudsman Service undertake to take action and refer complaints to the relevant bodies for them to be investigated and dealt with?
I look forward to reading your response in the comments section below.

Yours faithfully

Mark Alexander
Founder of


by Mark Alexander

4:16 AM, 7th October 2012, About 9 years ago

Hi Rich, Mr Hamer has a very capable assistant called the Trading Standards Institute, who as you may be aware, are merging with the OFT. I met their CEO yesterday at the NALS conference and he's a great guy too. It was great to share the stage with so many regulators and centres of influence with in the PRS. I came away absolutely buzzing.

by Nick Stott

16:39 PM, 10th January 2014, About 8 years ago

by tony

12:41 PM, 31st October 2020, About 9 months ago

Hi I found this article and all the comments very informative and helpful.
I have been involved in a similar situation for a wile with a so called property deal sourcing company.That claim to source SA, rent 2 rent deals as well as sourcing and selling large development deals to investors.They also claim to provide a hands off management service for such properties on behalf of investors.
They have ripped me off over a so called HMO rent to rent deal that they offered me.
They go under the name of insta deals Ltd and insta Group Ltd.
After purchasing one of their rent 2 rent deals which they claimed to be located in London, which was supposedly for a 60 month contract period.
Firstly the property address that was listed in the R2R contract
had nothing to do with there company, after viewing the property (that I did myself) after the company failed to arrange on my behalf for several months.
The property was occupied by the owner.
Insta deals claimed that they had put the wrong property address in the contract.but then failed to provide any other such address. Then they failed to issue any refund for the deal.
After making several checks with the various property redress
schemes as mentioned in this post, insta deals are not registered with any of them.
So I would request for Mark to report them to the Financial Ombudsman's man for investigation.
Also to warn other investors against doing any business with this company.
Who are clearly operating illegally as property agents,deal soursers and Estate Agents.
I think that such companies should be investigated, prosecuted for fraud and illegal practices and stuck off from
ever operating again.

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