Overview

Estate Agent Negligence

Estate Agents do not have to be professionally qualified to practice as such but many of them are professionally qualified and, as a consequence of membership of a professional regulator or association, will maintain professional indemnity insurance.

The most common of these is the Royal Institution of Chartered Surveyors (RICS) and the National Association of Estate Agents (NAEA)

Negligence claims against Estate Agents will mainly arise in the following situations:

  1. Marketing the property for sale at too low an offer price, causing a financial loss to the seller
  2. Marketing the property at too high an offer price, which makes the property  unattractive to a buyer, with the consequence that a sale is not achieved, or is delayed.
  3. Stepping outside the boundaries of their professional competence by giving legal advice.
  4. If they misrepresent a property, or otherwise mislead a buyer, causing financial loss.

The range of values… not all loss will justify a claim

It is important to appreciate that every property has a range of values that may be applicable as a reasonable selling price.  You could ask three different Estate Agents to value a single property and each of them may well come up with a different price. It is only where a property is obviously substantially over or undervalued that Professional Negligence occurs.

Professional Negligence can also occur where the Estate Agent steps outside the boundaries of his professional competence to give advice. This may be in relation to land matters that are within the professional competence of the Property Solicitor, but are firmly outside the competence of the Estate Agent. If the Estate Agent gives incorrect or misleading advice that causes the seller loss then he risks a claim in Professional Negligence, on the basis that they have held themselves out as having knowledge that in fact, they did not have.

There may be an alternative to Court action…

Before considering court action it’s worth exploring other options first:

Complain to the estate agent

The Estate Agent should have procedures in place to ensure that complaints about their services are considered carefully and that you receive a response within a reasonable time.

Complain to the Property Ombudsman (TPOS)

If you are not satisfied with the response you receive from the Estate Agent, (or of you do not receive any response at all), then, provided your Estate Agent is a member (directly or through the Office of Fair Trading’s Approved Estate Agent’s Redress Scheme), you may be able to refer a service complaint to the Property Ombudsman.

The Property Ombudsman is empowered to make awards of compensation of up to £25,000 for financial loss, distress and inconvenience where appropriate. This service is free of charge to the complainant. Complaints about sales, lettings, and residential leasehold management can all be considered, along with Disputes concerning small commercial enterprises who are members of the commercial scheme.

If the Property Ombudsman cannot resolve the matter for you, and where we believe you may have a viable claim, against an insured Estate Agent, then we may be willing to act for you on a conditional fee basis.

For us, a viable claim is one where we consider that you are more likely than not to win your claim and the claim is of sufficiently high value to ensure that the costs of bringing the claim are not disproportionate to its value.  Here’s why….

Small Claims and the ‘no costs’ rule

If your claim is worth £10,000 or less then it will be allocated to the ‘Small Claims’ track of your local county court.

The procedure is simplified to enable parties to represent themselves.  You can ask a lawyer (solicitor or barrister) to assist you with any aspect of your claim but, (with very limited exceptions) other than the court issue fee and some limited expenses, you will not be able to recover any of your legal fees against your opponent if you win your claim, (though if you lose your claim you will not have to pay your opponent’s legal costs either).

Where a client cannot recover their costs from their opponent, it is understandable that they will wish to keep their legal fees as low as possible and may only want a lawyer to draft the claim form and set out their claim properly. For the lawyer, this can present a risk that they do not know enough about all of the details of the case to be able to identify what should and should not be claimed, or to recognise aspects of the case that may be problematic. It is for this reason that we do not accept instructions in small claims.

Where we can help

We can advise you on your prospects of succeeding in a claim and, if we think they are reasonable, we will act for you in bringing your claim, in negotiating suitable settlement terms with the Estate Agent, or, if this is not possible, in bringing the claim to trial.

How much?… Funding your claim

Professional Negligence claims can be complex, high risk and expensive, so we understand that this may deter you from making a claim. However, where we think your claim is suitable, and at our discretion, we may take your case on under a Conditional Fee Agreement. We may also be able to arrange an insurance (called ‘after the event’ or ‘ATE’) policy that will protect you against any exposure to your opponent’s costs in the event that you lose your case or have to discontinue it.

This means that we will take or share the risk of your case, which will minimise the risk to you.

If you want to discuss your claim, in confidence, please call Jackson Lees on 0151 282 1700 and ask to speak to a member of our Professional Negligence team.

Useful web links:

www.tpos.co.uk

(The Property Ombudsman)