The Estate Agents (Provision of Information) Regulations 1991

Statutory Instruments

1991 No. 859

ESTATE AGENTS

The Estate Agents (Provision of Information) Regulations 1991

Made

28th March 1991

Laid before Parliament

28th March 1991

Coming into force

29th July 1991

The Secretary of State, after consulting in accordance with section30(1) of the Estate Agents Act 1979(1) the persons therein referred to, in exercise of thepowers conferred on him by section 18(4) of that Act and of all otherpowers enabling him in that behalf, hereby makes the followingRegulations:

Citation, commencement and interpretation

1.—(1) These Regulations may be cited as the Estate Agents (Provision ofInformation) Regulations 1991 and shall come into force on 29th July1991.

(2) In these regulations—

“the Act” means the Estate Agents Act 1979;

“associate” has the meaning given to it in section 32(1) of the Act;

“client” means a person on whose behalf an estate agent acts;

“connected person” in relation to an estate agent means any of thefollowing—

(a)

his employer or principal, or

(b)

any employee or agent of his, or

(c)

any associate of his or of any person mentioned in (a) and (b)above;

“estate agent” means any person who in the course of a business (including one inwhich he is employed) engages in estate agency work and includes caseswhere he is negotiating on his own behalf;

“estate agency work” has the meaning given in section 1(1) of the Act;

“financial benefit” includes commission and any performance related benefit;

“interest in land” means any of the interests referred to in section 2 of the Act andreferences herein to an“interest in the land” are references to the particular interest in land of which theestate agent is engaged to secure the disposal or acquisition;

“purchaser” means a person to whom an interest in land is transferred or inwhose favour it is created;

“services” means any services to a prospective purchaser for consideration,being services which are such as would ordinarily be made available to aprospective purchaser in connection with his acquisition of an interestin land or his use or enjoyment of it (including the provision to thatpurchaser of banking and insurance services and financial assistance andsecuring the disposal for that purchaser of an interest in land if thatdisposal is one which has to be made in order for him to be able to makethe acquistion he is proposing or is one which is a result of thatacquisition).

Additional information as to services

2.—(1) The following additional information is hereby prescribed and shallbe given by an estate agent to his client, that is to say as to theservices—

(a) which the estate agent is himself offering, or intends to offer, toany prospective purchaser of an interest in the land; or

(b) which he knows a connected person or (in a case where he or aconnected person would derive a financial benefit from the provision ofthe service) another person is offering, or intends to offer, to anyprospective purchaser of an interest in the land.

(2) The additional information referred to in paragraph (1) above shallbe given at the time and in the manner specified in Regulations 3 and 4below.

Time of giving information

3.—(1) The time when an estate agent shall give the information specifiedin section 18(2) of the Act, as well as the additional informationprescribed in Regulation 2 above, is the time when communicationcommences between the estate agent and the client or as soon as isreasonably practicable thereafter provided it is a time before theclient is committed to any liability towards the estate agent.

(2) The time when an estate agent shall give the details of any changesto the terms of the contract between himself and his client as arementioned in section 18(3) of the Act, is the time when, or as soon asis reasonably practicable after, those changes are agreed.

Manner of giving information

4.  The additional information prescribed in Regulation 2 above and theinformation required to be given under section 18(2) and (3) of the Actshall be given by the estate agent in writing.

Explanation of terms concerning client’s liability to payremuneration to an estate agent

5.—(1) If any of the terms“sole selling rights”,“sole agency” and“ready, willing and able purchaser” are used by an estate agent in the course of carrying out estateagency work, he shall explain the intention and effect of those terms tohis client in the manner described respectively below, that is tosay—

(a) “sole selling rights”, by means of a written explanation having the form and content ofthe statement set out in paragraph (a) of the Schedule to theseRegulations;

(b) “sole agency”, by means of a written explanation having the form and content ofthe statement set out in paragraph (b) of the Schedule to theseRegulations; and

(c) “ready, willing and able purchaser”, by means of a written explanation having the form and content ofthe statement set out in paragraph (c) of the Schedule to theseRegulations:

Provided that if, by reason of the provisions of the contract inwhich those terms appear, the respective explanations are in any waymisleading, the content of the explanation shall be altered so asaccurately to describe the liability of the client to pay remunerationin accordance with those provisions.

(2) Any other terms which, though differing from those referred to inparagraph (1) above, have a similar purport or effect shall be explainedby the estate agent to his client by reference to whichever ofparagraphs (a), (b) or (c) of the Schedule to these Regulations isappropriate, subject also to the proviso to paragraph (1) above.

(3) The explanation of the terms mentioned in paragraphs (1) and (2)above shall be given by the estate agent to his client in a documentsetting out the terms of the contract between them (whether thatdocument be a written or printed agreement, a letter, terms ofengagement or a form, and whether or not such document is signed by anyof the parties), and shall be given at the time specified in Regulation3(1) and (2) above.

Prominence etc. of explanation

6.—(1) Subject to the proviso to Regulation 5(1) and (2) above, theexplanations set out in the Schedule to these Regulations shall bereproduced in the documents embodying them in the same form as theyappear in that Schedule and without any material alterations oradditions to the text, and shall be shown prominently, clearly andlegibly.

(2) The wording of such explanations shall be given no less prominencethan that given to any other information in the document setting out theterms of the contract (as more particularly described in Regulation 5(3)above) between the estate agent and his client apart from the headingthereto, trade names, names of the parties and numbers or letteringsubsequently inserted therein in handwriting or in type.

Edward Leigh

Parliamentary Under Secretary of State,

Department of Trade and Industry

28th March 1991

Regulations 5 and 6

THE SCHEDULE EXPLANATION OF CERTAIN TERMS(2)

(a)

Sole selling rights

“SOLE SELLING RIGHTS

You will be liable to pay remuneration to us, in addition to anyother costs or charges agreed, in each of the following circumstances—

• if [unconditional contracts for the sale of the property areexchanged](3) in the period during which we have sole selling rights,even if the purchaser was not found by us but by another agent or by anyother person, including yourself;

• if [unconditional contracts for the sale of the property areexchanged](3) after the expiry of the period during which we have soleselling rights but to a purchaser who was introduced to you during thatperiod or with whom we had negotiations about the property during thatperiod.”

(b)

Sole agency

“SOLE AGENCY

You will be liable to pay remuneration to us, in addition to anyother costs or charges agreed, if at any time [unconditional contractsfor the sale of the property are exchanged](3)—

• with a purchaser introduced by us during the period of our soleagency or with whom we had negotiations about the property during thatperiod; or

• with a purchaser introduced by another agent during that period.”

(c)

Ready, willing and able purchaser

“READY, WILLING AND ABLE PURCHASER

A purchaser is a“ready, willing and able” purchaser if he is prepared and is able to [exchange unconditionalcontracts for the purchase of your property].(4)

You will be liable to pay remuneration to us, in addition to anyother costs or charges agreed, if such a purchaser is introduced by usin accordance with your instructions and this must be paid even if yousubsequently withdraw and [unconditional contracts for sale are notexchanged](5), irrespective of your reasons.”

Explanatory Note

(This note is not part of the Regulations)

Section 18(4) of the Estate Agents Act 1979 empowers the Secretaryof State to require that additional information be given to the clientsof persons engaging in estate agency work and to stipulate the time andthe manner in which that obligation, as well as the obligation to giveother information required by section 18, is to be performed.

These Regulations precribe that information as to the services beingoffered to prospective purchasers be given (Regulation 2), that thisinformation, as well as information about remuneration, be given at atime before the client becomes committed to the estate agent (Regulation3) and that it be given in writing (Regulation 4). Provision is alsomade for the form in which certain terms used by estate agents inconnection with their entitlement to remuneration are to be explained(Regulation 5 and the Schedule) and as to the prominence and legibilityof those explanations (Regulation 6).

(1)

1979 c. 38.

(2)

In lieu of the words“us”,“we”,“our”,“you” or“your” may be inserted or printed the name of the agent, the agency or theclient, as appropriate, and for“the property” may be inserted the address thereof.

(3)

In Scotland for the words in square brackets there shallbe substituted“unconditional missives for the sale of the property are concluded”.

(4)

In Scotland for the words in square brackets there shallbe substituted“conclude unconditional missives for the purchase of your property”.

(5)

In Scotland for the words in square brackets there shallbe substituted“unconditional missives for sale are not concluded”.