What fees and charges information you must give your clients, and how you must define terms of business.
Your client’s liability to pay
You must give your client a detailed breakdown of any charges, even if they’re estimated. You can’t just show a total figure.
You must give your clients this information in writing before you enter into a contract with them:
- when you’ll charge an agency fee, including any fees, charges or commissions if the property is taken off the market without a sale
- what your fee will be (if you’re not sure what that will be you need to say how you’ll calculate it)
- details, including the amount, of any other charges, apart from your agency fee, due under the contract to you or any other party to the contract, for example a surveyor or photographer (if you’re not sure you need to say how you’ll calculate them)
- any circumstances in which your client may have to pay an extra fee and how much it might be (if you’re not sure you need to say how you’ll calculate it)
- your percentage agency fee (this should include VAT and an example based on the agreed marketing price, for example, 'if your house sells for £300,000 you’ll pay a fee of £4320, 1.2% inc VAT at 20%')
- your fixed agency fee, including VAT
- a flat rate agency fee, including VAT
If you’re trading with another trader, you don’t have to include the VAT.
If you and your client agree that any term in the contract relating to your fees and how they’re paid is changed or varied, you must give your client the agreed changes in writing.
Your estimate of charges
Your estimate must say what it’s for. It should give your client a rough idea of the maximum amount they’ll need to pay.
When you put your estimate in writing, you can say that it’s 'an estimate of £X, that will not be more than £Y, without client approval'.
If you have a special brochure for your client’s property, you must tell them how much it will cost to produce each copy. If you need extra copies, you must ask your client to approve the additional costs.
How you must define terms of business
As part of your terms of business, you might use any of these terms:
- sole selling rights
- sole agency
- ready, willing and able purchaser
If you do, you must:
- explain in writing what they mean, using the definitions given in the legislation
- make sure they’re clear, legible and as prominent as the other terms of your contract with the client
You must use these definitions in full, unless this would be misleading because of the other provisions in the contract. If that’s the case, you should amend the definition to give an accurate description of the client’s liability to pay.
If you use any different term that means the same thing as the three terms listed above, you should still use the relevant definition to explain your term, unless this would be misleading because of the other provisions in the contract.
If you’re not sure about the terms you use and the service you provide, you should speak to an independent legal adviser or get further advice from:
- your local authority Trading Standards Service
- the Department for the Economy, in Northern Ireland
- your professional body or trade association
Cancellations
When you agree contracts with your clients, you need to understand your duties under the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013.
These regulations give consumers a 14-day cancellation period, if they agree a contract:
- off-premises, for example in a place that is not the trader’s business premises, such as the consumer’s own home, or
- at a distance, for example by phone or over the internet
The Business Companion website has more in-depth guidance on:
- the consumer’s right to cancel
- the information you must provide to your clients under these regulations
What are the approved estate agency redress schemes, and what happens if you don't join one.
Article 2 of the Estate Agents (Redress Scheme) Order 2008 says that if you engage in residential estate agency work, you must be a member of an approved redress scheme.
Redress schemes give consumers a way to escalate a complaint, if they're unhappy with how you've dealt with it.
If you don't join a redress scheme while engaging in residential estate agency work, you're breaching this requirement.
There are two approved redress schemes for estate agents:
If you don't join an approved redress scheme
If your local weights and measures authority (usually your local authority trading standards service) or NTSELAT believe that you are or have been engaging in residential estate agency work while not being a member of an approved redress scheme, they can issue a Penalty Charge Notice requiring you to:
- pay a penalty charge of £1000, or
- inform the issuing authority that you want the notice to be reviewed
Not belonging to an approved redress scheme may prompt NTSELAT to consider you as unfit to engage in estate agency work. This may result in a warning or prohibition order.
Read our pdf guidance on the requirement to join a redress scheme (209 KB) for more information.
Redress membership in property businesses
Legislation that describes what you must do to act lawfully in estate agency work.
There are several important pieces of legislation describing what you must do to act lawfully when engaging in estate agency work.
These include:
- Estate Agents Act 1979 and relevant legislation:
- Consumer Protection from Unfair Trading Regulations 2008 (CPRs)
- Business Protection from Misleading Marketing Regulations 2008 (BPRs)
- Consumer Rights Act 2015
- Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013
- Companies Act 2006
- The Company, Limited Liability Partnership and Business (Names and Trading Disclosures) Regulations 2015
- Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017
- The Energy Performance of Buildings Regulations applicable to your nation
The Business Companion website has free and impartial information about trading standards and consumer protection legislation.
Who can and who cannot be an estate agent.
There's no legal requirement to have any formal qualifications to engage in estate agency work.
However, a person can be prohibited from doing so if they fail to comply with or breach estate agency legislation.
The Estate Agents' Act 1979 states that you cannot engage in estate agency work if you're an undischarged bankrupt. You can work for an estate agency, as long as it's not your own company.
You cannot engage in estate agency work if you've been prohibited by:
- the National Trading Standards Estate and Letting Agency Team (NTSELAT)
- the Office of Fair Trading (OFT) up until 31 March 2014 (orders issued by the OFT still have effect)
Public Register of Orders
One of the key responsibilities of NTSELAT is to maintain a public register of warning and prohibition orders made under the Estate Agents Act 1979.
The register has details of individuals or businesses who:
- are currently prohibited from estate agency work
- have received a formal warning under the Estate Agents Act 1979
View the Public Register of Orders.
Estate agency work definition and exceptions, intermediaries, property raffles.
The Estate Agents Act 1979 (EAA 1979) regulates estate agency work, to make sure that:
- estate agents act in the best interests of their clients
- both buyers and sellers are treated honestly, fairly and promptly
Section 1(1) of the EAA 1979 defines estate agency work. You're legally an estate agent if you:
- have a business that deals with people who buy or sell freehold or leasehold properties in the UK, including commercial and agricultural properties
- send out property details and arrange viewings
- offer advice to potential sellers or buyers
- get enquiries from potential sellers or buyers, which you pass on to clients
- give clients a For Sale board, or put one up outside their property, with your contact details
- have a business that introduces buyers or investors to a “property deal”, also known as property sourcing
You're still legally an estate agent even if:
- you don't have physical premises
- you run your estate agency entirely online
Exceptions to estate agency work
Exceptions to the definition of estate agency work include:
- surveys or valuations carried out independently of other estate agency work
- work connected with planning applications or covered by the Town and Country planning legislation
- arranging rentals or property management for a client
- estate agency work carried out outside of, and with no connection to, the UK
- work done to arrange mortgages
- publishing advertisements or putting information in a newspaper or similar publication, so that the seller and buyer can communicate directly with each other
What an intermediary is
You're an intermediary if you:
- only pass on the seller's information to a prospective buyer
- only provide a way for the seller and buyer to contact one another directly, for example online
- don't offer any advice to a seller or a buyer, such as preparing property details or photographs or an energy performance certificate
- provide a branded For Sale board to the seller without your contact details
Intermediaries are exempt from some requirements under the EAA 1979 that are relevant to full service estate agency businesses, for example:
- disclosing any self-interest in a property transaction
- being a member of a redress scheme for residential estate agency work
Property raffles and estate agency work
A raffle is a competition where people buy tickets that are pooled together. A ticket is drawn at random and the ticket holder wins the prize.
The prize in property raffles is, usually, a house.
The promoter of a property raffle is engaging in estate agency work, if they're acting as an agent.
A promoter is not acting as an agent if:
- they're the promoter, and
- they have not set up a company to promote the raffle, and
- they own the property being raffled, which means their name is on the register of title for the property
An agent relationship exists between the owner of the property and the promoter, if:
- a company is set up to promote the raffle, and
- the property is not in the company's name
In this case, the promoter is engaging in estate agency work and must comply with all estate agency work legislation.
For further information on property raffles, read our pdf guidance on property raffles and the Estate Agents Act 1979 (196 KB) .
If you're not sure whether the work you do is estate agency work, you should speak to an independent legal adviser.
For more advice on the EAA 1979 and how it applies to you, contact:
- your local authority Trading Standards Service
- the Department for the Economy, in Northern Ireland
- your professional body or trade association
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