A case that The Property Ombudsman (TPO) was asked to review came from potential buyers concerning the advertising of a property as a three-bedroom house.
The buyers explained that they were specifically looking for a three-bedroom property. They went to view this one and later made an offer, which was accepted. However, a surveyor’s report showed that the loft conversion to the third bedroom did not have a building regulation certificate and therefore could not be considered as a third bedroom. The buyers believed that the agent failed to advertise the property correctly. Had it been marketed as a two-bedroom property with a third loft room, they said that they would not have viewed the property, and would not have incurred costs in respect of this aborted purchase.
The agent responded saying that it was not their responsibility to check the building regulations and/or planning permission prior to any marketing activity.
When marketing a property for sale, by law and under paragraph 7i of the TPO Code of Practice, the agent had an obligation to comply with the Consumer Protection from Unfair Trading Regulations (CPRs). The CPRs require an agent to disclose any material information of which they are aware, or should be aware, in relation to a property in a clear, intelligible and timely fashion. All reasonable steps should be taken to ensure that all statements made about a property are accurate and not misleading and that full details are provided.
It was explained to the buyers that the Ombudsman does not decide if there was a breach of the agent’s obligations under the CPRs; only a court can make such a determination. What the Ombudsman does is establish whether or not the agent’s service fell below that expected under the Code of Practice, and whether any shortcomings caused financial loss, aggravation, distress and/or inconvenience.
In this particular case, the Ombudsman had to consider what the buyers could have expected the agent to tell them based on what they knew about the property, consistent with their responsibilities under Paragraph 1e of the Codes, to provide a service consistent with fairness, integrity and best practice, as well their legal obligations.
The loft conversion was obvious, so should the agent have made enquiries about its planning status?
Having examined the evidence, the Ombudsman could see that the property was indeed advertised as a three-bedroomed house, although accepted it would be clear from any viewing that the third bedroom was a loft conversion. There was no evidence to show that the agent made any enquiries about the conversion to see if there was the necessary planning permission or building regulation approval.
In circumstances where it is apparent building work has taken place, the selling agent should request evidence or confirmation regarding the planning status of the works undertaken. In this case, it would have been obvious to the agent that there had been a conversion. As such, the Ombudsman would have expected them to investigate further so they could ensure all marketing material was accurate; if there was no relevant approval, this should have been disclosed to a buyer at the earliest opportunity.
The buyers only discovered that there was no building regulation certificate on the loft conversion after the survey had been carried out. The surveyor expressed concerns over the conversion, with nothing to confirm if it was of the standard required and therefore a suitable living space. Without this information, the buyers withdrew their offer immediately.
The agent had a responsibility to ensure that all material information was accurate and that there were no omissions. They failed to correctly describe the property in their sales particulars, which was considered misleading to the buyers and impacted their transactional decision.
The Ombudsman supported this case.
The buyers were seeking a refund of the money they paid for the survey, a fee of £900, which the Ombudsman considered to be fair and reasonable in the circumstances. The Ombudsman also considered that a further award of £100 was justified to reflect the aggravation, distress and inconvenience caused. A total award of £1,000 was made. This was in full and final settlement of this dispute.