The property was advertised by the agent as being a four-bedroomed house, but the buyer believed that they were misled when the surveyor highlighted that the extension (which housed the kitchen/diner and fourth bedroom) did not meet building regulations and therefore could only be used for storage.
The buyer was seeking a reimbursement of the abortive transactional costs that had totalled £952, along with an apology from the agent for the treatment they had received after a formal complaint was submitted.
When marketing a property for sale, the agent had an obligation, both by law and under Paragraph 7i of the TPO Code of Practice, to comply with the Consumer Protection from Unfair Trading Regulations 2008 (the CPRs).
The CPRs require an estate agent to disclose any material information of which they are aware in relation to a property in a clear, intelligible and timely fashion. Reasonable steps should have been taken to ensure that all statements that were made about the property (whether they had been oral, pictorial or written) were accurate and not misleading.
However, the agent was not expected, at the outset of the process, to research issues that are outside its line of business. For example, issues which would have been identified by a surveyor or conveyancer. However, they should have mentioned any significant non-standard features of the property for sale.
The buyers were misled by the agent about the bedroom and kitchen extension and sought reimbursement of their costs of £952.
In this case, the Ombudsman did not determine whether the agent was in breach of their statutory obligations under the CPRs. That would be for a court of law to decide. The role of the Ombudsman was to determine whether the service that the agent provided fell below that expected and whether any shortcomings caused financial loss, aggravation, distress and/or inconvenience, which would merit an award of compensation.
Having looked at the property particulars, the Ombudsman believed that it should have been clear to the agent that the area of the property which housed the kitchen/diner and fourth bedroom was a recent extension. Therefore, it would have been expected of the agent to ask the seller at the outset whether the extension met building regulations and also ask for a copy of the building control certificate.
This should have been done before the estate agency marketed the property as a four-bedroomed house. If the seller was unable to provide an answer and a certificate, then the agent had an obligation to inform all prospective purchasers at the earliest possible opportunity that they were unsure whether the extension met building regulations and that the property potentially only had three bedrooms.
The agent failed to demonstrate that they had done this, and the Ombudsman was critical of their inaction in this respect. The complaint was supported. The Ombudsman considered that an award of compensation was merited to reflect the aggravation and inconvenience caused by this issue. In this case the buyer, on learning that the fourth bedroom did not have the required planning consents, had continued with the proposed purchase, albeit they had attempted to negotiate a price reduction.
At that point, the seller withdrew from the sale.
The agent was not directed to compensate for the abortive transactional costs that the buyer was seeking as it was apparent that, despite the failure to disclose the information, the buyer remained keen to purchase. However, the buyer had been entitled to receive all material information from the agent at the start of the transaction. A compensatory award was made for the aggravation caused by the agent’s failure by the agent to disclose that information to the potential buyer.
The Ombudsman did not support the second part of the potential buyer’s complaint that the agent’s complaint correspondence was curt and dismissive. While it was appreciated that the potential buyer was upset that the agent had not agreed to refund the costs requested, the Ombudsman was satisfied that the agent responded in a polite and professional manner, in accordance with best practice requirements.
Overall, the Ombudsman concluded that the agent had failed to act in accordance with their obligations under the Code when providing information about the number of bedrooms in the property.
An award of £300 in compensation was made for the undue and avoidable aggravation and inconvenience caused.