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Take care with vulnerable customers

Christopher Hamer imageAgents who are members of the TPO Scheme are obliged to acknowledge and cater for the needs of vulnerable customers. This is an important obligation and I do see cases that are referred to me where the complainant has alleged that the agent has failed to take into account their specific vulnerability.

Under paragraph 1f of the TPO Code of Practice, there is a requirement to make satisfactory provisions for attending to the needs of vulnerable customers. Although ‘vulnerable customers’ is not defined in the Code of Practice, I take my definition of vulnerability as anything that may have an impact on a person’s ability to make a sound decision, such as physical and mental health  disabilities, language difficulties, age and unfamiliarity with, or difficulty in understanding the house buying and selling or letting process. Despite what a number of complainants seem to believe, pregnancy, per se, does not, necessarily, fall into this category.

Assessing vulnerability

Assessing the potential vulnerability of a consumer is a sensitive matter. If the consumer declares a vulnerability or it is obvious that the consumer has a vulnerability (eg blindness), I expect an agent to consider the possible effect of that vulnerability on the proposed transaction. If no vulnerability is declared, but it becomes apparent that there may be one, I expect the agent to seek clarification from that consumer (or their representative). It is important that enquiries must be considerate, unlikely to offend and can in no way be interpreted as discriminatory.

Once again, it is best practice and record keeping that is vital.

I expect that staff should understand their obligations in this area and all registered firms should have appropriate procedures and training. A guidance note is available to download from the members’ area of the TPO website.

Staff should be willing and able to offer appropriate advice about the house buying, selling or letting process to all consumers; whether or not they consider a consumer to be vulnerable, it is best practice. Assumptions should not be made about the degree of knowledge that a consumer may have; If in doubt, spell it out. It is sensible to explain what you, as agent, will do and what other parties (solicitor, surveyor, financial advisor, mortgage lender) will do. This is especially important, but not exclusive to, firsttime buyers and sellers.

If the consumer does have special difficulty which raises concerns about their vulnerability, this must be taken into account in any information that is given to them. This is particularly important if any decision that the consumer will make is based solely on that information. If that decision has any legal connotations, an agent must explain that they should discuss the matter with their solicitor.

Under certain circumstances, I would agree the breakdown of a marriage and the consequent sale of the marital home could have such an impact on a person’s decision making process. However, the breakdown of a relationship, in itself, does not warrant special provision. I believe that it would be totally inappropriate for any agent to presume that because a relationship had broken down the individuals concerned were unable to make decisions regarding the sale of a property. For marital breakdown to render a partner vulnerable, I would need to be satisfied that the individual was experiencing difficulty in making the necessary decisions regarding the sale of their house.

Demonstrating compliance

Under the TPO Code of Practice, an agent must be able to demonstrate that they have complied with these requirements in respect of all consumers. A clear and detailed record must be kept of all conversations in their progress notes. If an agent has concerns and recommends that a consumer seeks independent advice, the recommendation should be in writing to be able to evidence that appropriate advice was provided.

In a recent case, one of the allegations was that the Agent had taken advantage of the Complainant, a potential buyer, due to his vulnerability (related to mental health issues). It was apparent that, at the time in question, neither the Agent, nor indeed the Complainant was aware of the health concerns and the Agent, concerned by some of the specific peculiarities of the matter, had repeatedly advised the Complainant, in writing, to seek independent advice from both a solicitor and surveyor. The Complainant chose to reject such advice. I did not support the complaint, the Agent could show that they had taken all reasonable and appropriate steps in the circumstances.

The lesson is that regular, appropriate communication, which takes into account the specific needs of the individual consumer, is of the utmost importance.

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