The property sector may be overreacting to the sudden withdrawal of material information guidance, according to a leading property litigation specialist. David Smith (pictured).

Smith, an expert in residential tenancies and property regulation, suggests the move might actually benefit the market despite widespread industry concern.

I do not see this as a bad thing.”

“I was expecting the withdrawal of the material information guidance, but I do not see this as a bad thing,” says Smith.

“First and foremost, I think the guidance was poor. It did not properly set out the law and had added a whole range of new obligations from previous guidance without any underlying changes in the law. Secondly, it was just not terribly well written and was confusing.”

As reported in The Neg, last week, National Trading Standards announced that all parts of the current Material Information guidance had been withdrawn with immediate effect due to the new Digital Markets, Competition and Consumers Act 2024 (DMCC Act) replacing and superseding the initial legislation on which the guidance was based.

Contrary to popular opinion, Smith argues that the withdrawal will not leave property professionals without support. “I do not think the withdrawal actually leaves agents without cover. There is the previous guidance, which can be found online, and, in my experience, the majority of agents have a pretty clear idea about what is material information.”

Industry bodies such as Propertymark, on the other hand, have described the sudden withdrawal as potentially causing ‘considerable confusion.’

RICS has similarly criticised the move, saying it has created significant uncertainty for property professionals and called it a ‘regrettable and backwards step’, particularly after substantial resources were invested in implementation.

Significant uncertainty

Smith acknowledges there will always be questions where the boundaries of the rules are unclear, so advises taking a cautious approach: “If something might be material, then the safest course is to make that information available, but if a principled decision is taken the courts are going to think twice about questioning that.”

And Smith is not convinced the new DMCC Act will significantly change the regulatory landscape: “I think the new Act says much the same as the existing regulations, and the guidance could easily have been carried over had NTS been confident in it.

“It will be interesting to see how much interest the CMA actually has in dealing with this going forward.”

The Competition and Markets Authority has published general guidance on unfair commercial practices, but industry stakeholders continue to call for more sector-specific information to help navigate the new requirements in the property sector.

General guidance on Unfair Commercial Practices

What businesses need to know about unfair commercial practices

Guidance on the CMA’s approach to consumer protection