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What is today's blog about?
Do you know your CPRs from your BPRs? Confused about what these mean for you when dealing with commercial or residential estate agency work?
Don't fear - Property Elite are here to explain all you need to know about the Consumer Protection from Unfair Trading Regulations 2008 (CPRs) and the Business Protection from Misleading Marketing Regulations 2008 (BPRs).
This will be relevant to some of the mandatory RICS APC competencies, as well as Leasing & Letting and Purchase & Sale, amongst others. Essential reading for RICS APC and AssocRICS candidates.
You can also listen to our CPD podcast on Anchor for more free AssocRICS and RICS APC training and support.
Why is this relevant?
When dealing with the sale and letting of land and property (both residential and commercial), you must comply with the CPRs and BPRs.
This means that whether you are a RICS APC candidate, professional member or student - having an understanding of the relevant legislation is essential.
We will focus on the CPRs in this article, although breaches under the CPRs will generally constitute a breach under the BPRs.
Someone mentioned the Property Misdescriptions Act 1991 (PMA), what is this?
The PMA was repealed by the CPRs and BPRs in 2008. Essentially, the new legislation widened the scope of consumer and business protection so agents can no longer rely on the principle of caveat emptor ('buyer beware').
What are the CPRs?
The CPRs are legislation to stop businesses from 'engaging in unfair commercial practices' (RICS, 2014).
Where do the CPRs apply?
To any marketing or property services which reach or are capable of reaching UK consumers. This may include businesses and properties located outside of the UK.
Who do the CPRs apply to?
Almost anyone you deal with as an agent may be considered to be a 'consumer', e.g. existing/potential clients, viewers, buyers, sellers, tenants etc. This goes beyond just your paying clients.
What are the penalties for non-compliance?
Court order to cease action
Unlimited fineUp to 2 years' imprisonment
Prohibition order from undertaking agency work
You might also face the following:
Consumer complaint to an approved address scheme, which may result in an apology and up to £25,000 compensation
Damage to your reputation
Loss of business
What is the general principle of the CPRs?
To treat consumers fairly. Doing this means that you are likely to comply with the CPRs and BPRs.
More specifically, an agent must not engage in unfair commercial practices by 'saying, doing or omitting to say or do something which causes, or is likely to cause, the average consumer to take a different transactional decision' (RICS, 2014).
What commercial practices are considered to be unfair?
Giving false/leading information
Hiding/failing to provide material information (i.e. what you don't say - this differs from the former position under the PMA 1991)
Acting aggressively/exerting undue pressure
Not acting with sufficient professional skill/care and in good faith
Engaging in banned practices
Who is an average consumer?
A consumer who is 'reasonably well informed and reasonably observant and circumspect, taking into account social, cultural and linguistic factors' (RICS, 2014).
This may be modified where:
A property is targeted at a specific type of consumer (average targeted consumer)
A property is targeted at vulnerable consumers, e.g. elderly, first time buyers, first time renters (average vulnerable consumer)
What is a transactional decision?
Paying for services
Buying a property
Renting a property
Accepting an offer
Viewing a property
Commissioning a survey
Paying a pre-contract deposit
What is material information?
This is what is required by the average consumer to make an informed transactional decision, taking into account the relevant context.
This might include:
Quoting rent / price
Proposed lease terms
You may also need to signpost consumers to publicly available information relevant to the wider context, e.g. flood risk, flight paths, listed building status, planning. This could be via website links or telephone numbers on your marketing material.
What if I don't have all of the material information?
If you don't know something, it could still be a misleading omission not to disclose it!
You need to take reasonable steps to identify the information if it would be required by the average consumer to make an informed transactional decision.
Reasonable steps you make take include:
Recording information you do know
Addressing any gaps by speaking to your client or associated third parties, e.g. building surveyor, lawyer, architect
Verify information if it's accuracy is questionable
Challenge or investigate further if you are concerned about the information
Provide material information you identify to consumers before they make a transactional decision
If you become aware of further information later on, disclose it at the earliest opportunity
Keep an audit trail of the information you hold and where it was sourced from
How can I comply with the CPRs?
Have adequate staff training or undertake CPR to increase your knowledge of the CPRs and BPRs
Check you have systems in place to comply with the CPRs
Consider how you deal with consumers, i.e. do you treat them fairly?
Make sure you carry out due diligence checks during an agency transaction
Ensure you verify material information
Signpost consumers where necessary to wider information
Consider who the average consumer may be for a transaction
Keep good file records
Review & revise your procedures on a regular basis
How can we help?
Head to our blog archive to access even more free CPD and AssocRICS and RICS APC training and support.
Download your free AssocRICS and RICS APC resources, including e-books and revision quizzes.
Find out more about our bespoke AssocRICS and RICS APC training and support, before booking your free 15 minute consultation and signing up for your services online.
Stay tuned for our next blog post to help build a better you
N.b. Nothing in this article constitutes legal or financial advice.