The revised codes, came into effect on 1st October 2015 and were approved by the Chartered Trading Standards Institute (CTSI).
Christopher Hamer, the Property Ombudsman, says: “As part of the most recent Codes of Practice review process, we have produced further guidance in collaboration with the Competition and Markets Authority (CMA) to help support TPO members and improve standards within the industry. This guidance note supplements section 3 of the TPO Code of Practice for Residential Estate Agents and has been drafted with the aim of ensuring agents do not compromise honesty in relation to the advertising of fees. These guidelines come as a result of a well reported case that happened earlier this year where the CMA found that an association of estate agents and a newspaper publisher had entered into an illegal anti-competitive arrangement, breaking the competition. CMA imposed penalties of over £735,000.
This guidance reflects updates to the Codes and the industry is expected to apply it. Non compliance with the practice may not only result in sanctions from the CMA, but could also mean possible exclusion from membership of TPO once reviewed through the Disciplinary and Standards Committee (DSC).
Ann Pope, CMA Senior Director of Antitrust Enforcement, said: “It’s clear that some agents are still unclear how competition law applies to their business which is why we wanted this guidance to be disseminated widely. We wanted to assist agents and help the industry understand their responsibilities and what is seen as inappropriate practice.
In particular, we wanted to highlight that the ability of agents to advertise their fees or discounts freely plays an important role in stimulating price competition between competitors. If agents are prevented from advertising their fees or discounts in the media fee levels may be artificially inflated and owners are likely to find it harder to assess which agents offer the best value for money. It could also make it harder for new entrants to enter the market and compete effectively with established agents. Agents that continue to restrict their advertising of fees or discounts in this way are breaking the law and may face severe consequences.”
