A project implemented by the National Trading Standards Estate and Letting Agency Team requires more material information to be provided when a property is listed for sale or rent.
National Trading Standards wants the provision of material information to be compulsory when an agent enters details on a property portal or otherwise provides them to a buyer or potential tenant. As well as giving buyers and tenants as much information as possible to help them make an informed decision before putting in an offer, disclosure of more information should reduce the enquiries that need to be raised during the conveyancing process, reduce the number of buyers who decide to pull out of a transaction and help purchases complete more quickly.
A survey of over 300 estate agents carried out by National Trading Standards and its industry partners found that 91% agreed that a defined list of basic material information would help improve clarity, while 93% felt that the property’s status as a leasehold or freehold should be disclosed.
What material information will need to be disclosed?
Trading Standards have compiled a three-part list of information that it is hoped will become mandatory to disclose. Estate agents have started with the first section, referred to as Part A. While it is not currently compulsory to include the information, if fields are left blank it will be flagged up to potential buyers along with an explanation of why the missing information could be important.
Part A information is information which is always considered material for all properties and which generally involves unavoidable costs.
Part B mainly relates to utilities and other information that must be established for all property, where non-standard features might affect a decision to buy.
Part C is additional information that may or may not need to be established, depending on whether or not the property will be affected.
Part A information
The material information required in Part A is as follows:
- The tenure:
- Freehold; or
- Leasehold. If leasehold, then:
- That the property is leasehold
- Ground rent and review period
- Service charge information and review period
- Length of the lease
- If the property is shared ownership: details of the share that is to be sold and any additional liabilities
- If the property is commonhold: details of rights and obligations between the unit holders and between the unit holders and the commonhold association
- Council Tax:
- The Council Tax band
- Price or rent:
- For lettings:
- The monthly rent
- The deposit payable
- For sales:
- The price expressed as a single amount
- For lettings:
Objectives
The new information is intended to make renting and buying more transparent for buyers and tenants, giving them a better understanding of issues such as the importance of tenure before they start a property search.
Where necessary, conveyancers can provide information regarding leases and restrictive covenants early on, preventing delays later in the process.
James Munro, Senior Manager of the National Trading Standards Estate and Letting Agency Team, said: “This represents an important milestone in the journey to improve material information on property listings. I’m delighted with the progress that has been made with the industry to help define and clarify what constitutes material information and I am grateful to the property portals and other industry leaders who have supported this work. I am aware that there are software companies who are already enabling this information to be included in property listings.
“These technical changes will prompt all players in the property market to do things a bit differently. Vendors and agents may find that bringing conveyancers on board at the outset helps ensure all information is available for marketing, and issues with things like restrictive covenants or boundaries can be addressed earlier. For consumers, a better understanding of why certain information such as a property’s tenure is important will enable them to make informed decisions when they embark on a property search.
“This project will make it easier for estate and letting agents to meet their legal obligations and we look forward to supporting them as they get to grips with a new way of working. We also welcome the involvement of the conveyancers, lawyers and other organisations who are already on board with the process and are putting support in place for agents.”
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