20th May 2015
The estate agency sector has been reported to the regulator for its use of long exclusivity periods that prevent sellers from instructing other agents.
The online estate agency eMoov.co.uk issued the complaint to the Competition and Markets Authority after legal counsel advised that the use of lengthy sole agency agreements are likely to breach Consumer Protection from Unfair Trade Regulations 2008 and the Unfair Terms in Consumer Contracts Regulation 1999 rules.
Sole agency agreements lock consumers in to a period of exclusivity, usually extending to as long as 20 weeks, but often continuing indefinitely until written notice to cancel is provided by the seller.
Throughout this time, they are contractually prevented from instructing another agent to list their property regardless of the original agent’s performance. If they do breach these contract terms, consumers are liable for penalty fees which can be up to 3% of the eventual sale price.
The property website says that the nature of these agreements, coupled with a number of additional small print clauses, designed to further increase the agent’s monetary gain, are putting UK sellers at a severe disadvantage.
Russell Quirk, of eMoov.co.uk, says: “These excessive periods of exclusivity, especially when taken together with the other restrictive clauses, are quite plainly not in line with consumer interests.
“As with many aspects of the high street sector, it’s a Jurassic and outdated practice. Imagine going out for a meal, only to find the food and service are diabolical, but being told that actually you can’t leave and you even have to have pudding. Once you’ve choked the meal down, you’re then landed with a substantial bill, including an extortionate service charge, with no choice but to pay it.”
Quirk adds: “The mind boggles as to how in a country where the laws on marriage, hunting, workplace conduct, consumer rights and so much more, are constantly being updated to align themselves with the society we live in, something as backwards and regressive as a Sole Agency Agreement still remains.”
The complaint lodged with the CMA is specifically aimed at the widespread and unfair use of excessive sole agency and selling right agreements, deployed by agents predominantly in the high street sector.