John Bridgeman, Director General of Fair Trading, said: "It is extremely disappointing that some undesirable practices are making a comeback. Agents should take note that if I have evidence that they are failing to meet their obligations I can ban them from practising."
These "undesirable practices" include:
l Telling buyers that if they do not take linked financial services, or use the agent to sell their own property, they will not be put on a preferential service list;
l Telling buyers their offer will not be passed on until it has been "qualified" by the agency's financial adviser;
l Telling sellers that the law requires them to sign agreements with an agent when there is no such obligation;
l Using "For Sale" boards incorrectly.
In a clear warning, intended to encourage estate agents to take a responsible attitude, Mr Bridgeman said: "Potential buyers are being led to believe that their offers will not be passed on unless they organise their financial services or sell through the estate agency.
"This must stop. Ignorance of estate agents' obligations is no excuse. Anyone working in this field should be aware that discrimination on this ground is not allowed, that all bids must be passed on promptly and in writing, and that they must inform sellers of the services they are offering to potential buyers. Failure to end such discrimination may also lead me to recommend to the Government that the offering of linked services should be banned. Estate agents have a fiduciary duty to do the best for their client. They cannot achieve this if they are only prepared to circulate details of properties to, and forward offers from, a preferred group of buyers.
"I also want to stop the practice of misleading sellers that they have to sign agreements with estate agents. Clients should be told that these are negotiable contracts with the agent, not a regulatory requirement.
"Finally, for Sale boards should be used appropriately, or an offence may be committed under the Trades Descriptions Act or local planning legislation."
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