This is Part 3 of a five-part series. Law firm STBB hosted a webinar on the topic of ‘caveat emptor’ and the following is the transcript:
…continued from Part 2
Consumer Protection Act (CPA) and property transactions
Introduced approximately a decade ago, the CPA extends its provisions to property transactions under specific circumstances:
- Estate agent services: When estate agents facilitate property transactions as part of their business, they are considered suppliers under the CPA. This mandates them to provide services of a certain standard, ensuring accuracy in property marketing and disclosure of known defects through mandatory property condition reports.
- Seller’s responsibilities: Estate agents must ensure the accuracy and quality of property information disclosed to prospective buyers, as mandated by the CPA. Buyers benefit from increased transparency and the ability to make informed decisions based on comprehensive property disclosures.
- Habitual sellers: Developers, investors with large property portfolios, or speculators engaged in frequent property transactions fall under the CPA’s scope. As suppliers, they are obliged to deliver properties that are safe, of good quality, and fit for the purpose for which they were acquired.
- Implied warranty: Under the CPA, buyers are entitled to implied warranties that the property is of acceptable quality and fit for its intended purpose. This places a substantial burden on sellers to ensure their properties meet these standards, offering buyers recourse in cases of non-compliance.
For sellers, particularly estate agents and habitual sellers, compliance with the CPA is crucial to avoid legal repercussions and uphold consumer rights. It necessitates transparency, accurate disclosures, and adherence to prescribed standards of service and property quality.
Buyers benefit from enhanced protections under the CPA, mitigating risks associated with undisclosed defects or misrepresented property conditions. They can expect properties that meet statutory quality standards and are suitable for their intended use, thereby fostering confidence in property transactions.
Obligations imposed by the Property Practitioners Act
- Immovable property condition report: Central to the Property Practitioners Act is the requirement for estate agents to ensure completion of an Immovable Property Condition Report when facilitating property transactions. This report, completed by the seller to the best of their knowledge, details the condition of the property and any known defects.
- Purpose and limitations: The report serves as a tool to inform potential buyers about the property’s condition. It does not constitute a warranty but rather a disclosure mechanism aimed at assisting buyers in making informed decisions.
- Agent’s responsibilities: Estate agents are obligated to ensure that the Immovable Property Condition Report is provided to prospective buyers. This obligation arises when the estate agent is actively involved in the transaction process.
- Liability for non-compliance: Failure to provide the report or disclose its unavailability can result in regulatory penalties, including fines imposed by the Property Practitioners Regulatory Authority.
Continued in Part 4…
