By Bob Howard
BBC Radio 4's Money Box
Tesco has suspended the private sales section of its property website and offered a full refund to customers.
Tesco is hoping to find a silver lining for its online property site
The decision came after the Office of Fair Trading told the retailer it was acting as an estate agent, so would need to abide by the relevant laws.
Tesco launched the site in July. Part of it offered customers the chance to sell their home for £199.
Customers got a "for sale" sign and a listing on the website, and saved money as there was no estate agent's fee.
Soon after it was launched, a representative of the board of the Ombudsman for Estate Agents wrote to the Office of Fair Trading to ask if Tesco was effectively acting as an estate agent.
The OFT's stance
Peter Bolton King from the National Association of Estate Agents believes one of the issues that the OFT took into consideration, was the prospect of Tesco customers being charged twice:
"Vendors could find themselves in a situation where a sale was agreed by someone introduced through the property portal, but at the same time they had a contract with another estate agent - therefore they would be liable for two fees."
Tesco is not the only private property sales website which may come under scrutiny.
In recent years many specialist websites have sprung up which also offer to help you sell your home without going through an estate agent.
Roger Young, the OFT's head of Estate Agent Enforcement, says they may also now have to abide by the relevant laws:
"If an internet property retailer does anything for their clients more than simply carry an advertisement, for example if their website has a message board for sellers to contact buyers, they will be doing estate agency work.
"It may well be that most internet property retailers are acting as estate agents."
Tesco says customers liked the site and it is now considering launching a full online estate agency service.
In order for that to work, it concedes it would need to get its properties on to the big property portals, like Rightmove and FindaProperty.
Given these companies' existing business links with the traditional High Street estate agents, that may prove to be a challenge.
But Tesco's Jonathan Church says negotiations have already begun:
"We need to take forward discussions now with the portals, but as an online estate agent that will be subjected to the full regulations under the 1979 act, we see no reason why we should not be listed on these portals."
BBC Radio 4's Money Box was broadcast on Saturday, 13 October 2007 at 1204 GMT.