At the end of November 2023 the National Trading Standards Estate and Letting Agency Team (NTSELAT) published the next stage of its project to give guidance on the meaning of material information. This involves full guidance for estate agents and lettings agents, and a series of quick guides aimed at landlords, tenants, buyers, sellers and agents.
Regulation 6 of the Consumer Protection from Unfair Trading Regulations (CPRs) requires that prospective tenants and purchasers are not subjected to misleading omissions within property advertising. This is defined as omitting or hiding “material information” or providing it in a way that is “unclear, unintelligible, ambiguous or untimely”. The regulation says that material information is “information which the average consumer needs, according to the context, to take an informed … decision”.
The difficulty with this definition in practice is that it is not terribly helpful. Some things are likely to be obvious. Not providing the rent expected or the purchase price of a property is likely to be failing to provide key information that a tenant or purchaser is going to need. But it still leaves a lot of information that many tenants or purchasers might want in a zone of uncertainty. For example, is having a petrol station opposite a property useful, material, or not that important? In that sense a piece of guidance that answers these questions and gives some sensible views is welcome. NTSELAT had produced some minimum guidance on things that they considered to be absolutely required and have now expanded this with a further list of things they consider to be material. Their efforts to do this are useful and should be commended.
However, this only works if the right approach is taken. NTSELAT are not the arbiters of what is material. This is ultimately a question for the courts. NTSELAT guidance will no doubt (and rightly) be very persuasive to the courts but it is not the be all and end all of material information. Each case will have to be considered on its merits. The foreword to the full guidance documents does make this clear in that the team says the guidance is what it “considers to be good practice”. Unfortunately not all of the statements from the NTSELAT match up to this careful position. For example, on the webpage launching the guidance the NTSELAT has suggested its guidance “defines” material information. It clearly cannot do anything of the sort. More concerningly, agents are increasingly dealt with more by the various redress schemes and ombudsmen that govern their behaviour. Some of them have suggested they will be abiding strictly by this guidance and they have a reputation for using guidance to define agent responsibilities rather than looking at the actual legislation and for being quite inflexible about this interpretation.
Added to this is the quite extreme requirements and the obvious ambition in the guidance. The sales guidance suggests that flood risk, building safety issues, and the existence of rights and easements are all material. On the website that NTSELAT further suggests that agents should be instructing conveyancing solicitors at marketing stage to obtain this information. This is very far from the legal position. In relation to the Property Misdescriptions Act, which was replaced by the CPRs, the courts were clear that agents were not obliged to provide information that was properly a matter for a conveyancer. I would be surprised if the position was to be much different under the CPRs. In addition, most conveyancers will not advise on Building Safety Act matters and a number are now not even insured to conveyance such properties. So expecting agents to advise on these issues is entirely unrealistic.
In summary, the guidance is a good idea and parts of it, especially parts A and B are good. Part C is likely to be entirely unenforceable in practice and of course, in practice, local authorities almost never prosecute agents under the CPRs as they simply do not have the requisite resources. However, agents should read the guidance carefully and seek to apply it to the extent they reasonably can.