‘Professional Indemnity insurance should be mandatory for agents’

Industry senior Michael Day has called for all agent to have an appropriate level of professional indemnity insurance (PII) cover to help soften the blow of any future fines that could arise after recent guidance from National Trading Standards.

Day (main picture), Managing Director of Integra Property Services, says changes to upfront material information under the Consumer Protection Against Unfair Trading Regulations 2008 could have a serious impact on estate and letting agents’  PII requirements.

DIFFERENT

Whilst the regulations have been in force since 2008 recent guidance from National Trading Standards is creating a different landscape in which sales and lettings agents have to operate.

He warns: “Parts A, B and C are there to try and be helpful to agents in focusing on basic material information. There have, however, been many prosecutions and redress scheme awards relating to other elements that were considered as material information and either disclosed incorrectly or not disclosed at all.”

And he adds: “Whilst these changes, which will become visible on the portals within the coming weeks, will mean agents have to start obtaining the information required and there are opportunities to improve business, it will undoubtedly, also expose agents to a greater risk.”

There is a strong possibility agents may stray into providing advice.”

Day, who was awarded the Lifetime Achievement gong at The Negotiator Awards, reckons that with the portals likely to include a descriptor of “Ask the agent” whenever an item of material information is omitted from property details, there is the strong possibility of agents receiving larger numbers of queries and questions about aspects of a property and the likelihood that the agent may stray into providing advice or comments accordingly.

PROSECUTIONS

He says: “This will increase the risk of erroneous information, or an interpretation of that information being passed to a consumer with the subsequent risk of complaints and prosecutions increasing.

“Without PII cover in place, an agent could be facing the entire costs of handling the complaint and making whatever compensatory award or fine etc that may result, themselves. Appropriate PII cover will, at least, mitigate this position.”

Although the outline proposals for ROPA doesn’t specifically mention the need for PII cover Day believes it would be likely.

He adds: “I believe that having an appropriate level of PII cover should be mandatory for all agents and it would certainly be good business practice for an agent to ensure that their cover is adequate and appropriate.”