Whenever a property is put on the Market, estate and lettings agents are required to not omit information which is material to the listing. This essentially means any material information which is important to the prospective purchaser or tenant and would be important to them in making an informed decision. This requirement is governed under the Consumer Protection from Unfair Trading Regulations 2008. The problem is that practices have been inconsistent across the property market as there was no set definition as to what information is “material”. The National Trading Standards Estate and Letting Agent Team have taken actions to address this. We will look at this update in more detail in this article.
What is Material Information?
At its most basic, material information is information that the average consumer, in this case either a property purchaser or a prospective tenant, would need before entering into an agreement to make an informed choice. The importance here is the information that is needed to make an informed decision.
National Trading Standards Estate and Letting Agent Team are taking a 3 phase approach to the introduction of required material information:
- Part A: Information that, regardless of outcome, is always considered material for all properties regardless of location. This information generally involves unavoidable costs that will be incurred by the occupier regardless of the use of the property.
- Part B: Information that must be established for all properties. It applies mainly to utilities (and similar), where non-standard features would affect someone’s decision to look any further at that property.
- Part C: Additional material information that may or may not need to be established, depending on whether the property is affected or impacted by the information. Applies to properties affected by the issue itself because of, for example, the location of the property.
Part A is being introduced now and all property listings must have this information by the end of May 2022. This information is:
1. Tenure (applicable to sales listings only)
• the listing must state clearly that the tenure is ‘freehold’
• Disclosed as ‘leasehold’
• Current ground rent with review periods
• Current service charge information and any review period
• Length of lease
If Shared ownership, disclose
• Details of share being sold, and any additional liabilities or obligations
If Commonhold, disclose
• Details of rights and obligations that apply between the unit holders, and between the unit holders and the commonhold association.
2. Council Tax (England, Wales & Scotland), or Rates (Northern Ireland) – disclose
• Council tax band (England, Wales & Scotland)
• Rates payable (Northern Ireland)
3. Price or Rent
For lettings, disclose
• The monthly rent, and
• Any deposit payable
For sales, disclose
• The price expressed as a single amount
If any of this information is not provided in the initial listing, then there will be a link to guidance which will explain to consumers why the information is important and how they can find this information.
The information that will be required under Phases B and C will come out in due course as it is developed by the Trading Standards steering group.
These new requirements will make listing properties much more transparent and gives clear guidance to sellers, landlords and agents and clear information to buyers or tenants.