Marketing a property for sale: best practice

The National Trading Standards (NTS) published guidance in November 2023 on material information to be included when listing a property for sale. It is fair to say a degree of chaotic commentary has ensued off the back of this, and the conduct and regulation of estate agents has been placed firmly in the spotlight.

The regulatory shift is generally welcomed by the leading industry agents. Marketing is now so much more than the hard copy brochure handed over at the start of a viewing. Whilst there are many upsides to the property video tours that have become a daily staple of our Instagram and TikTok feeds, with bright-eyed agents showing off the glamorous interiors of the UK’s finest houses and flats, it is important not to lose sight of the fundamental duties placed upon agents when marketing a property.

Background

Interestingly, while the law in this area has not changed over recent years, the past decade has seen a drop off in prosecutions for non-compliance.

People of a certain vintage will remember a time when it was commonplace for agents to be prosecuted under the Property Misdescriptions Act 1991 (PMA). Each of these examples was subject to prosecution: a property described as having a sea view when the view of the sea was obscured by flats; a failure to emphasise that a picturesque house was situated on the north-east facing side of a valley; a property sold with off street parking without a dropped kerb to access the parking; and an "18^th century house with Georgian features" that was in fact built in 1865.  

The PMA was repealed in October 2013 and replaced by the Consumer Protection from Unfair Trading Regulations 2008 (CPR).

Whilst the CPR is not property-specific, it goes further than the PMA to provide robust protection for individuals against unfair practices by those marketing property for sale. Such unfair practices include failing to provide material information to a prospective purchaser which is likely to influence their transactional decision making.

The consequences of breaching the CPR can include criminal sanctions as well as reputational damage. These are regulations that should be taken seriously by any person or company marketing a property. 

Forward planning is key

The Law Society has recently updated the Property Information Form (PIF) and Leasehold Information Form (LIF) (also referred to as the TA6 and TA7) off the back of the NTS guidance published last November. These are the forms that should be completed by a seller at the start of the conveyancing process. The updates are significant: the PIF has gone from being an 18-page document to a 32-page document, but the aim is to ensure the forms will extract from a seller all the material information that the NTS says should be disclosed on property listings. However, for this to be of actual benefit to agents for their marketing of a property, a seller should be encouraged to engage a lawyer at the very start of the selling process. Lawyers can then ensure full completion of the PIF and LIF and agents can take comfort that they accurately hold the full suite of material information before the launch of a property for sale.

A seller may be reluctant to engage solicitors at the very outset but the reality is in doing so there will be a greater chance of ensuring a transaction will proceed first time and in a timely manner - a benefit not to be understated! With all information on the table from the get-go this will be factored into price and there should then be no surprises to spook a buyer down the line. Agents can also take comfort that as the focus on their marketing practices intensifies the material information for disclosure is all in hand.

What is material information?

What counts as material information will vary depending on the nature of the transaction. It will tend to include (as a minimum) the asking price, tenure, size of rooms, utilities and, where the property is leasehold, the length of the lease, level of service charge and ground rent, and any cladding issues affecting the building. It needs to cover both positive and negative material information.

The NTS guidance distinguishes between Part A information and Part B and C information. Part A information (which includes price, tenure and council tax/rates) needs to be prominently displayed and Part B and C information should not be more than one click away for online listings. Where space is limited (such as an A4 advert in a magazine), reference should be made to where the material information can be found.

We have prepared tables summarising what information could be considered material in the context of a freehold country house sale and, separately, a leasehold London flat sale and these are available here (note these are not exhaustive lists; the specifics of any given property will need to be reviewed in assessing material information).

In summary

Agencies would be well advised to ensure that all marketing produced by employees (whether digital or hardcopy) adheres to the NTS required standards. What constitutes "material information" can be vast and will vary for each property to be sold. Good and early preparation of a sales pack by a seller working in cohesion with its agent and lawyer will help to streamline this process and extract all relevant information at the outset.

Further information on the National Trading Standards is available here and an overview of the Law Society updates to the PIF and LIF is available here.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, May 2024