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Selling a rental property

"A landlord, who wanted to sell his rental property, complained to The Property Ombudsman about two issues: the estate agent’s viewing arrangements and their financial evaluation of the buyer, reports Katrine Sporle, The Property Ombudsman.

Katrine Sporle
COMPLAINT

Estate agent with buyers imageThe first part was regarding the viewings of the property after he decided to sell it.

The complaint was that the agent did not follow the seller’s instruction regarding the conduct of viewings, instead allowing the tenant to do some of them.

During the viewings, it was alleged that the tenant, who was unhappy that she would have to vacate as the property was being sold with vacant possession, made potential buyers aware of a number of issues at the property.

The agent confirmed that a small number of viewings were carried out by the tenant but said this was only as the tenant offered to do so as they were in occupation. The agent apologised to the seller but said that it would not have impacted the sale of the property.

INVESTIGATION: ISSUE ONE

In accordance with Paragraph 8a of the TPO Code of Practice for Residential Estate Agents, the agent was required to take the seller’s instructions regarding viewings, specifically whether or not they should be conducted by them. As they were arranging to view an occupied property, the agent should have made arrangements with the occupier, in this case the tenant, beforehand wherever possible.

The agent provided progress notes which showed that the seller had requested that they inform him of all viewings, saying that he wanted the agent to be present at all viewings so that the tenant did not deter viewers.

Katrine Sporle image

Katrine Sporle

The Ombudsman was critical that the agent did not act in accordance with the seller’s wishes in this regard. Whilst they were required to inform the tenant where possible of all viewings, they should not have relied on her to undertake some of them without them being present.

Whilst it could not be determined whether the tenant attempted to put anyone off the property, the Ombudsman considered that the seller suffered aggravation as a result of his request that the agent attend all viewings not being followed.

This part of the complaint was supported by the Ombudsman.

INVESTIGATION: ISSUE TWO

Once a buyer was found, the seller complained that the agent did not send him any information regarding how the buyer was funding the purchase. He said that the agent advised him by telephone, when the initial offer was made, that the buyer had already sold and did not require a mortgage.

The buyer did in fact require a mortgage and he was also in the process of selling a leasehold property; the seller said that this did not come to light until a few months after he accepted the offer. The seller believed that a full financial evaluation was not carried out.

The agent said that they did carry out a full diligence on the buyer and that they made the seller aware of the chain together with the financial circumstances of the buyer.

The seller asked to be informed of all viewings, and he wanted the agent to attend all the viewings so that the tenant didn’t deter viewers.

In accordance with Paragraph 10a of the Code, the agent was required to take reasonable steps to find out from the buyer the source and availability of his funds for buying the property, at the time the offer was made and being considered, and to pass this information on to their seller client. Such information should have included whether the buyer needed to sell a property and/or required a mortgage. Information that is available should have been included in the Memorandum of Sale.

THE DECISION

There were notes to show that, at the point the offer was accepted, the buyer had provided proof of funds and solicitor details and advised that he also required a small mortgage. The seller was informed of the buyer’s upcoming mortgage appointment.

The Memorandum of Sale stated the buyer’s position as ‘sold subject to contract, buying with a mortgage’. The Ombudsman was therefore satisfied that the agent had confirmed with the buyer’s agent that his property had sold subject to contract and also had sight of his mortgage agreement. The Ombudsman was also satisfied that the seller was made aware of the buyer’s position.

This part of the complaint was not supported.

OUTCOME

The Ombudsman supported one complaint made in this case and considered that it merited an award of compensation.

Some avoidable aggravation was caused in relation to the conduct of viewings.

The Ombudsman made an award of £100 in compensation for this element of the complaint in full and final settlement of the complaint.

February 12, 2019

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