WHO, WHAT, WHY?
The Magazine answers...
For most people buying a house is the biggest transaction of their lives. So just who can set up an estate agents and handle such an important job?
Open for business in just 24 hours
Buying a property costs people financially and often in blood, sweat and tears as well.
It places estate agencies in a powerful position, with so much at stake you would expect there to be stringent rules about who can set up such a business.
There aren't. This may go some way to explaining the industry's bad reputation, which has only been reinforced by a BBC investigation exposing agents lying to customers, faking signatures, obtaining false passports and doing dodgy deals with developers.
Under the Estate Agents Act 1979 anyone can set up in business as one unless they have been banned by the Office of Fair Trading or are bankrupt. But even with the latter, they are free to work for another estate agent - just not open their own.
No knowledge of the housing market or the laws governing the industry is needed.
To prove just how easy it is, in 2004 consumer organisation Which? opened a fake estate agency in central London. It took 24 hours, cost just £143 to register the business with Companies House and Cheatem & Ripoff was in business.
Despite the name and the obviously fake properties advertised in the window, customers still came in and asked for more details.
"Just about anyone can set up an agency and start advising people on the biggest purchase of their lives," says a Which? spokeswoman.
"People who have no knowledge of the housing market, have never bought or sold a house and have no idea about the law governing estate agency, which means it is very likely they will break the law unwittingly."
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The few laws that are in place covering the industry deal with how estate agencies conduct their business, not who they are.
Agents have to comply with the Estate Agents Act 1979 when they act for people who are buying or selling property and the Property Misdescriptions Act 1991, which makes it an offence to make false or misleading statements about property offered for sale.
The Office of Fair Trading (OFT) did approve its first code of practice for estate agents on Tuesday, aimed at ensuring that buyers and sellers get a fair deal and are less likely to be duped by maverick agencies.
The Ombudsman for Estate Agency (OEA) scheme can award compensation to buyers or sellers of property if it finds they have been badly treated.
However, it is not mandatory and at present only four in 10 UK estate agents are scheme members. Which? says if belonging to the scheme was a requirement by law, a bad estate agents could be barred from practising much more easily.
The UK should learn from Japan's experience, which had many dodgy real estate brokers. In the mid to late 80s, Japan introduced an exam testing basic civil law and property rights knowldege and every real estate broker needs to pass that exam and apply for a license before practicing. This has significantly reduced the number of dodgy agents in operation and increased the confidence of the public.
Abdou Kane, London
I worked as an estate agent a while ago for about 18 months, for one of the largest chains in the country. I received very basic training in the Property Misdecriptions Act 1991, but none in the Estate Agents Act 1979 and it was apparent that senior members of staff knew no more than me about these.
Despite being a member of the Ombudsman scheme, there were large numbers of dodgy practices happening, many illegal and all from the senior staff/managers. Yet we were one of the most ethical agents I came across!
The industry should be better governed, with a professional body providing accreditation to individual members based on training in the legal aspects and ethical approaches to work, much the same as an accounting body does.
All estate agents should be made to join (and abide by the rules laid down by) the RICS (Royal Institution of Chartered Surveyors) which has extremely high levels of professional conduct and would guarantee that consumers are protected
Nick Jones, Wrexham, North Wales
The BBC's undercover exposure of the dirty side of this industry shows that it simply cannot self-regulate. So many people have been badly stung by estate agents performing in an incompetent or deceptive way. Its time for the Government to take action.
The lack of proper oversight and regulation is staggering - we have a very firmly enforced regulatory regime as relates to investments and pensions in this country and penalities for any mis-selling or mis-representation are great. For most people the investment in their home dwarfs their other investments - it is high time for a similarly rigourous oversight regime, with teeth, to ensure professionalism and integrity in the way property is bought and sold.
David Smalley, London, UK
I always thought that the lack of regulation was quite deliberate to generate revenue for small to medium sized businesses (albeit often illicitly gained revenue). However, it is astonishing how little regulation there is for English estate agents compared to Europe or even Scotland.
For example, a verbal agreement to buy or sell a property is legally valid in Scotland to the best of my knowledge - to an English estate agent however it's often viewed as a gazumping opportunity!
Tim Jones, Solihull
Literally anyone can become an estate agent - by that I am not referrring to the logistics of becoming an estste agent, moreover that anyone can perform the task of facilitating the selling of something somebody else willingly wants to buy.
I think estate agents should definitely have to study for a one year qualification similar to a librarian in order for them to understand the industry and make a commitment to it.
Cheatem & Ripoff is pretty much the name of the game yes!
Jean, Montreal Canada
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