The Office of Fair Trading (OFT) last October announced that there will be a repeal of the Property Misdescriptions Act as the Consumer Protection Regulations (CPRs) aim to develop and extend an estate agent’s duty of care to consumers as well as selling clients. National property firm Strutt & Parker looks into what these changes will mean for the industry.

The Property Misdescriptions Act 1991 (PMA) makes it an offence to make false or misleading statements in the course of estate agency business when advertising property for sale.  Following a consultation process, the Government announced that the PMA will be repealed; instead, the CPRs will be relied on to protect both property sellers and buyers. This decision will replace the custom legislation that deals with the needs of one market with an all-encompassing law that is not designed specifically for property sales.

The CPRs are potentially more powerful than the PMA and the regulations will now include a ban on misleading omissions, which are not currently controlled by the PMA.

Agents' first reaction to the repeal of the PMA was one of dismay: the Act is not perfect, but, importantly, it is there to regulate property marketing and sales to purchasers on specifically prescribed matters, which makes the estate agent's life easier. It is also supported by a body of case law which legal professionals can use to advise their clients with precision. Conversely, the CPRs are relatively new legislation and provide a more general protection which will be extended to property. They are standardised and covers a much broader area than the PMA.

Annabel Clery from Strutt & Parker's Estate Agency department explains: "This means that estate agents will have to consider not just what they do say about a property, but also what they don't say. They must ensure that any applicable truths or particulars are actively made available to potential buyers."

Clery adds: "Although in the short term it may be difficult for sellers to accept that we are required by law to mention any issues which are likely to affect a potential buyer's decision on making an offer or not, the advantage is that this added transparency means that buyers will be fully aware of any shortcomings around a property well in advance of making an offer, which in turn should ensure that fewer deals collapse once in solicitors hands."