Appeal Court decision

There has been plenty of publicity surrounding the Foxtons hearing in the Court of Appeal concerning when commission payments become due.

In order to prove whether or not your firm is entitled to a commission you will need to be sure you keep full records of all dealings with the parties involved, especially where a viewing does not result in an immediate sale or offer.

To be able to claim commission, there has to be proof of more activity than merely introducing a prospective buyer to a property via a viewing - there needs to be actual follow up and records need to be kept of all this activity.

To comply with the OEA Code of Practice, these are records you should already be keeping, as a matter of course.

Keeping up professional standards

These are challenging times for all involved in residential estate agency and it is taking much more hard work to conclude property sales. It is important that, in pursuit of sales, professional standards are not allowed to slip. The industry will be under great scrutiny from both the media and the public while there is a strong focus on the difficulties of the property market.

If your firm is forced to close offices, or cease trading completely, make sure that any clients you may transfer to another estate agent are aware they will have to sign a new contract with that agent to cover liabilities and fees which may be different from those in your own contract. Please ensure that you inform the OEA membership section of any changes.

Membership numbers

Membership currently stands at 12,699 branches (5,808 firms); representing around 85% of residential agencies and this percentage looks likely to grow once the CEAR law comes into effect. Of that total, 7,612 branches are involved in sales, and 3,381 in sales and lettings. A further 953 branches cover lettings only and 753 branches are registered just for their HIPs activities.

Consumers, Estate Agents and Redress legislation

We hope to hear very shortly about approval for our application to operate a redress scheme under the new law which is expected to come into force on 1st October. As mentioned before, should this happen then there is nothing agents who are already full members of OEA need to do as you will already comply with the legal requirements.

However, if you are one of the few hundred agents still only registered for HIPs activities, you can transfer across to full membership at no extra cost until your next renewal date, when your subscription rate will rise to that for full membership currently £120 per office per annum. Otherwise you will need to register with an approved redress scheme under the CEAR Act of which the OEA expects to be the principal one and your registration for HIPs will fall away.

Also, it is important to remember that if you run an estate agency under a franchise business, that each separate franchise business will need to be registered with an approved redress scheme under the CEAR Act on or before the law comes into effect.

Buying agents will also be required to be part of an approved redress scheme once the law comes into effect, as will all estate agents in Northern Ireland and Scotland who do not belong to a scheme at the moment. If this includes you, then it will need action on your part to comply with the law to avoid trading illegally.

Bill McClintock,

Chairman, OEA Board.

Consumers Estate Agents Redress Act - nearly there on approval

We hope to hear very soon that we have been named an approved redress scheme under the new CEAR Act. It is expected to come into force on 1st October 2008.

As I pointed out in my last newsletter, if we are approved, and I see no reason why we should not be, then as far as I am aware you have absolutely nothing to do to comply with the redress requirements of registering with an approved Scheme if you are already a full member of the OEA. Only those who registered in England and Wales for their HIPs activities alone and agents in Scotland and Northern Ireland who are not OEA members will need to take action, if they are to remain on the right side of the law.

I would urge those of you who only have membership covering your HIPs activities to act now and take up full membership. Once the Government has announced which redress schemes are approved I anticipate we may see a rush of applications and it's always better to be at the front of the queue than the back.

Unless there are really onerous new conditions to be met under CEAR rules, then I anticipate there will be no extra cost to existing OEA members this year and we will do our very best to hold subscriptions at their present level for next year. As trading conditions continue to be difficult this year, I expect that's news you will all welcome!

New team running membership

The team running membership services at OEA is now being led by Sarah Sartin, assisted by Laura Baldwin and Jay Johnson. Sarah and Laura were on the team during the rush of membership applications that followed the introduction of HIPs and should be well able to keep up when CEAR makes redress compulsory.

Our finance manager, Martin Brown, continues to be assisted by Anne Hall.

Cleaning up the database

Work is nearly completed on cleaning up the membership database so that we have up to date details of all member companies, their branches, and contacts.

If you are aware that information we hold about you is incorrect from previous contacts, but you just haven't got round to letting us know, then please tell us now as it will make our task easier than having to back over the same ground later.

House of Lords Reception

During March our Council Chairman Lord Borrie Q.C. co-hosted an evening reception at the House of Lords to welcome NALs members into OEA.

The event was attended by Iain Wright, MP, Parliamentary Under Secretary of State for Communities and Local Government, who said the private rented sector was a key priority for him. He portrayed himself as a champion of the sector and expressed his commitment to ensuring the industry is kept at the top of his office's political agenda.

The Minister said he wanted to see good landlords incentivised and less scrupulous landlords penalised. Accreditation is the way to achieve this. He said he was supportive of the work of NALS and the OEA and its new agreement which enables tenants and landlords across the UK to benefit from fast and free and independent resolution of disputes with lettings agencies across the UK.

We were also able to make some very useful contacts in the political and property lettings arenas which I am sure will be of benefit to OEA in the future.

Code of Practice for Letting Agents

We have submitted an application of our lettings Code of Practice to OFT for approval under the Consumer Codes Approval Scheme. This may take a little time to achieve but I hope it will enjoy the same success as the residential sales Code of Practice, which is now regarded as a standard setter within the industry and allow a joint OEA/OFT logo to be used by lettings agents who are members of OEA.

Bill McClintock,

Chairman, OEA Board.

What happens when CEAR comes into force?

A good number of agents seem to be wondering what will happen when the Consumers, Estate Agents, and Redress Act takes full effect.

It had been thought the new law would be operative from early April but it now seems it might be the autumn before its requirements come into force.

This only serves to increase uncertainty but the OEA has submitted what we believe to be a strong application to be an approved provider of redress under CEAR.

If we are approved, and I see no reason why we should not achieve this, then you have absolutely nothing to do to comply with the redress requirements if you are already a full member of the OEA. Only those who registered in England and Wales for their HIPs activities alone and agents in Scotland and Northern Ireland who are not OEA members will need to take action, and possibly very quickly, if they are to remain in business.

You may receive a letter inviting you to join an alternative scheme that does not operate a Code of Practice. Be aware that if you leave OEA now and join an alternative that does not get approval then you will be unable to continue trading. We have made what I believe to be a convincing case for approval and, at the very least, I would advise you to keep up your OEA membership until the government has revealed who has approval.

Taking advantage of monitoring

It's interesting to see that quite a number of members are capitalising on good feedback from their independent monitoring that comes as part of OEA membership.

When significantly high ratings are received, members use them as the basis for a press release for their local media that illustrates the good assessment of their business and how it will benefit other consumers looking to buy or sell residential property.

Some people within the industry suggest that monitoring is a waste of time and negative. Far from it. Monitoring lets you know your strengths and weaknesses, enabling you to capitalise on your best points and improve areas where you maybe fall short.

It's an exercise that costs you nothing as it is part of your OEA membership but could greatly enhance your business. Look at it positively and it becomes an unseen guiding hand that can be of great assistance. Don't let those who publicly pillory the system deter you from using it. They are the misguided ones, not you.

Logo display

The original OEA window logo, which all members should display prominently on their premises as a requirement of being in the OEA, is going to come in two forms.

There will be one that denotes sales and another for lettings so that members who cover only one or other of these activities can make the distinction clear. Where your office is registered with OEA for both sales and lettings then you will be required to display both.

OEA is the one that counts

A spare minute spent browsing Sqm magazine was very rewarding. An article on the many organisations involved in residential estate agency and all the acronyms they use revealed that it's the OEA which pundits believe is the most recognized set of initials and the one that means most to consumers.

Dominic Agace, of Winkworth, is quoted as saying: 'From a public perception, I believe the Ombudsman, the OEA, is the group that clients are most aware of and is the most important in upholding industry standards.'

Andrew Dickinson, of Oakwood Homes, comments that it is important to be seen and recognised by certain affiliations, among them the OEA. David Newnes, of Your Move, points out that his company is a founder member of OEA and continues to get proactively involved, helping ensure a continued focus on service delivery. He hopes that 2008 will be the year when the whole industry throws off its lethargy and gets behind us.

Perhaps Joe Catcheside, of Underhill, sums it up best. 'The only important official body is the OEA,' he states. Hear, Hear!

Membership continues to grow

We may have ended 2007 with an all-time membership high but that hasn't stopped even more agency branches coming under our umbrella in the first weeks of 2008.

By the end of February, membership stood at 13,085 branches belonging to 5,630 firms. It seems that many of you concur with the sentiments expressed in the Sqm article quoted above. Only a small number of estate agencies are now outside the OEA and Ombudsman Christopher Hamer and I will continue working hard to bring them into the fold.

Changes to Consumer Guide

Changes have been made to our Consumer Guide, this can now be downloaded from our website. Hard copies of this should shortly be available from our office in Salisbury.

Please don't be tempted, in the interests of economy, to use up remaining old copies first. Bring the new ones into use straight away and dispose of the old ones by putting them out for recycling wherever you can.

Bill McClintock,

Chairman, OEA Board

Membership passes 12,000 mark

In my last newsletter, I reported that, as the year was drawing to a close membership of the OEA passed the 12,000 office mark.

By December 31, the number of offices included in the scheme had risen to 12,344, a brilliant total and one we have worked hard to achieve, even though we had the HIPs legislation last year to assist us.

That new law only required a bare minimum registration for HIPs provision in England and Wales but I’m glad to say that only 703 offices ended the year registered for just their HIPs activities alone. Virtually 11,000 offices (the actual figure was three short of that) were full members signed up to the Code of Practice while another 644 offices covered just lettings alone.

NALS now covered by OEA

The New Year has brought positive change for the lettings market.  With effect from January 1, tenants and landlords of properties across the UK will benefit from a new partnership between the OEA and NALS (National Approved Letting Scheme) allowing them easier access to independent redress in order to settle disputes and seek early resolution to issues.

Previously, NALS accredited lettings firms had used arbitration as the final stage in the complaints handling process. The new agreement with the OEA, now gives independent redress for both tenants and landlords at NO cost to either party and provides the lettings sector with a potentially faster yet professional service in line with best practice for a small annual fee. The procedure is based on seeking early agreement by all parties through a more informal decision process. Where this is not possible OEA will carry out a full review of the complaint.

NALS has more than 1,500 member offices and 1,200 accredited firms throughout the UK who recognise the benefit of promoting themselves in their local marketplace as part of an industry wide accreditation scheme. OEA has already been undertaking work on lettings disputes for about 18 months, since NAEA lettings firms came under our umbrella, but this involvement with NALS will significantly raise our profile among those involved in this part of the property world.

Changes to membership arrangements

Members now only need to give the OEA one month’s notice to terminate instead of six, which some of you who decide to retire or change business might find helpful. Naturally, any complaints that arise from a firm’s activities while it was still part of the OEA can still be dealt with by the Ombudsman.

I would just like to remind you that non payment of fees may result in the termination of membership and that this will include your registration for HIPs if applicable, which could affect your legal status to operate as an estate agent in England and Wales.

Non compliance with the monthly monitoring of agents dealing in residential sales may also result in OEA membership being terminated, but any registration for HIPs this will remain in place.

The Board decided at its last meeting that if a membership was terminated and the former member later wished to be reinstated there would be a reinstatement charge of £50 plus VAT.

The year ahead

We have many exciting plans for the year ahead and some major changes will be involved that alter the way the OEA is perceived by the public.

We are still formulating our plans, but what we have in mind will greatly enhance the image of the OEA and its members, so your full membership will be more important than ever. One of the most important matters is for OEA to become an approved redress provider under the Consumers, Estate Agents and Redress Act, scheduled to become effective from April. Providing we are approved, let me just remind you that existing OEA members should not have to take any action to comply with this law and there should be no additional charges.

Many pundits are predicting that 2008 will be a difficult year for the housing market but I hope you are all able to prosper during what may be challenging times. It’s important not to let professional standards slip – remember that with the launch of the Consumers, Estate Agents and Redress Act some time this year all eyes will be on us and our standards of behaviour will be closely scrutinised.

Bill McClintock,

Chairman, OEA Board.

Membership passes 12,000 mark

As the year heads to a close, membership of the OEA has passed the 12,000 office mark.

Of the 12,204 offices participating in the scheme at the end of November, only 668 were registered for the bare minimum under HIPs requirements, a very good sign of the professionalism within the residential estate agency industry in England and Wales as it means the vast majority of agents are signed up to our Code of Practice.

As I am writing this, there are another 177 applications for full membership being processed along with 94 for HIPs registration.

I think the industry is to be largely congratulated on the progress made with regard to membership – OEA membership has risen more than 50 per cent year on year for the last two years but complaints against agents have not risen by anything like the same rate.

Submission to Sir Bryan Carsberg

I have been working with Christopher Hamer on a submission to Sir Bryan Carsberg, who is making an investigation into residential estate agency.

His report will no doubt receive a lot of attention in the media when it is published in the summer and we both feel it is important to contribute to the debate.

Submissions have to be with Sir Bryan by January 7 and there is nothing to stop individual estate agents having their say, too. It would be a good idea for as many voices as possible to be heard, so if you can tear yourself away from the cold turkey over Christmas maybe you could write in to Sir Bryan as well.

Consumers, Estate Agents and Redress Act

The OEA has made an application to be an approved redress scheme under the new legislation, which is likely to come into effect in April when all residential estate agents will be required to have an independent redress scheme in place.

At present, we are working through the inevitable points raised by the Office of Fair Trading that need clarifying and are hopeful that our application will be successful.

If it is, there will be nothing for full members of the OEA to do as you will already meet the requirements of the legislation. I’m sure you’ll be pleased to know there will be no extra paperwork and, even better for you, no additional cost.

Northern Ireland visit

Christopher Hamer and I went to Northern Ireland as planned on October 31 to meet trading standards officer and estate agents.

The visit was arranged by David Livingstone, head of the Trading Standards Service in the province, and I would like to thank him for the trouble he took.

It’s fair to say we had a fairly robust round of discussions with estate agents - there are more than 630 estate agency outlets in Northern Ireland and less than 20 per cent are covered by the OEA scheme. We hope to see a massive increase as a result of our visit. Watch this space.

NALS signs up to OEA

From January 1, all members of the National Approved Lettings Scheme will have their independent redress provided by the OEA.

We were able to offer NALS a tailor-made scheme, having started to cover lettings activity for NAEA members from the middle of 2006.

I would like to extend a warm welcome to the NALS membership. Christine Rowland-Jones will be looking after any cases that might arise involving NALS members.

Satisfaction survey

Many of you will be familiar with our consumer satisfaction surveys, where we ask buyers and sellers how your agency has performed.

Well, OEA will also be coming under the spotlight as we intend to set up a survey of how we are serving you. I hope it will show the same good results that the majority of members get from the general public. We will certainly take careful note of any issues you may raise.

Season’s greetings

After such a busy year, with so many changes affecting residential estate agency taking place, I’m sure you will all be looking forward to a well-earned break over the Christmas and New Year period before starting 2008 totally refreshed and raring to go.

The staff at OEA have also had a very busy time and I would like to thank them for all their efforts.

It just remains for me to wish you all, estate agents and OEA staff, a very happy Christmas and I hope 2008 brings a prosperous New Year.

Bill McClintock,

Chairman, OEA Board.

More team changes

There is a new finance manager looking after the affairs of the OEA. Martin Brown took up his position on October 1 and reports to me for member-related finance matters and to Christopher Hamer for office finance issues. His role means that all finance matters are aligned in one place.

Chris Rowland-Jones, who had previously overseen out administrative function, has transferred to become a case officer. She will have specific responsibility for dealing with complaints about lettings received in relation to National Approved Lettings Scheme members. We are in the process of finalising the arrangement with NALS which will make us their dispute resolution service.

Sue Hurst is taking on an expanded role, and in addition to managing initial enquiries she will become responsible for facilities and IT. She will be assisted by Anya, who becomes initial enquiries supervisor responsible for the day to day oversight of initial enquiries. Gail Newell is taking up the post of part time HR manager.

Northern Ireland visit

Christopher Hamer and I will be in Northern Ireland on October 31 to meet trading standards officer and estate agents.

The visit has been arranged by David Livingstone, head of the Trading Standards Service in the province who invited us to Belfast after we all met in London.

We will meet trading standards officers during the morning before an informal lunch time session at Trading Standards’ Newtonbreda HQ with trading standards officers and estate agents.

In the evening, we will address an invited audience of estate agents representing the NAEA, RICS, and Irish Auctioneers’ and Valuers ’ Institute.

There are more than 630 estate agency outlets in Northern Ireland and less than 20 per cent are covered by the OEA scheme. We want to see a dramatic improvement in this and hope the visit will help raise awareness.

Independent reviewer appointed

Cyril Lanch , who has a background in the City and financial services regulation, has been appointed as the independent reviewer for the OEA by the organisation’s governing council, chaired by consumer champion and former director general of fair trading Lord Borrie.

Mr. Lanch’s role is to determine disputes where consumers using the OEA feel they have not received a satisfactory level of service and have been unable to resolve their dispute directly with the organisation, which deals with complaints against member estate agents. He will not be conducting a complaints procedure for people who disagree with a decision made by the Ombudsman.

Mr. Lanch’s career has spanned the Economist Intelligence Unit, the Bank of England, FIMBRA, PIA, and the FSA as well as working as a freelance consultant in financial services regulation and ombudsman services.

Complainants will be directed to Mr. Lanch if the OEA cannot settle the matter through its own internal complaints handling procedure.

If Mr. Lanch considers that a service complaint should be upheld in whole or in part he may recommend to the Ombudsman that the OEA makes an apology or pays appropriate compensation (equivalent to that which the OEA would award against a member firm in similar circumstances) for any damage, distress or inconvenience caused by the OEA’s standard of service to the person or firm making the service complaint.

If the Ombudsman does not accept that recommendation, the Mr. Lanch will refer the matter to the independent Council of the OEA.

Bill McClintock,
Chairman
OEA Board

New Ombudsman named

The new Ombudsman for Estate Agents is Christopher Hamer.

Mr. Hamer (53) succeeds Stephen Carr-Smith and takes up his appointment on December 1, 2006. He is only the third person to hold the position since the Ombudsman for Estate Agents scheme started in 1989.

With a strong background in ombudsman schemes, starting as private secretary to the Parliamentary Ombudsman in 1984, Mr. Hamer brings a wealth of experience to his new role.

Most recently, he spent six years with HSBC as head of insurance product and distribution risk but previously he was general manager of the Personal Investment Authority Ombudsman Bureau and, before that, director of services at the Insurance Ombudsman Bureau.

Baroness Gillian Shephard, chairman of the OEA has welcomed Mr. Hamer’s appointment.

“As we move towards the Government’s ambition to appoint an ombudsman with authority under legislation as part of the HIPS scheme, Christopher, with his knowledge of ombudsman schemes and his past work in government, should put OEA in a strong position and will build on the excellent work of his predecessors,” she added.

Membership

More than two thirds of all the estate agency branches in England and Wales now participate in the OEA scheme – it covers 7,194 branches belonging to 2,423 member firms. This represents 68 per cent of branches in England and Wales or 60 per cent across the UK as a whole.

Application is logical step

The OEA is making an application to the Department of Trade and Industry to be the appointed Ombudsman under the 2004 Housing Act that brings in the HIPS scheme next June. It would seem a logical step in view of the large number of estate agents already in the OEA scheme.

New Bill proposed

In the Queen’s Speech on November 15, it’s believed the Government intends to announce the Consumer, Estate Agents and Redress Bill. I understand that it will proposed that all residential estate agents are members of an Ombudsman redress scheme and again OEA will be pressing to become the recognised Ombudsman for the industry.

Thanks to Stephen Carr-Smith

I would like to thank Stephen Carr-Smith for his outstanding service as Ombudsman, a position he took up in August, 1999. Stephen has worked hard for the industry during a period that has seen substantial growth in the OEA membership.

OEA membership has grown considerably during the time Stephen has been Ombudsman but the level of complaints has dropped in proportion to the rise in membership numbers. Even so, Stephen has had plenty to keep him occupied and it’s evident from reading his annual reports that he has worked exhaustively to ensure that all parties involved in a complaint are happy with the outcome.

Bill McClintock,

Chairman, OEA Board

1 - Membership of the OEA for NAEA Agents.

I welcome the NAEA decision that all NAEA Principle, Partners and Directors less RICS are to join the OEA Scheme as at 3 April 2006. However, we can only look into a complaint if the EA concerned is a registered Member Agent of the OEA Scheme. A steady stream of NAEA Estate Agents (EAs) has been joining the Scheme since 3 April. However, it is taking some time for them all to send in their applications and for us to process them. In the meantime, I have issued my staff with the following instructions:

We can only look into a complaint if the Agent is registered on the OEA database - OR is on the OEA spread sheet as having applied but not yet been registered.

If the complaint is against an NAEA EA and does not fall into the above categories, we will:

• Inform the Complainant that the EA concerned is not a registered OEA Agent and we cannot take the case yet.
• Advise the Complainant to raise the matter with the NAEA if they have not done so already.
• Inform OEA Membership accordingly.
• Put the complaint on suspension for the time being.

OEA Membership is to inform NAEA and ask them to take action to encourage the EA concerned to submit his OEA application as soon as possible.

We will regularly check whether the particular EA has applied to join the OEA.

As and when that application is received, we will inform the Complainant that we can now take on the case.

In the event that the EA does not send his application to the OEA within 28 days, Membership is to inform the NAEA for them to take appropriate disciplinary action.

However, unless the EA does join the OEA, we cannot take on the case. We will have to inform the Complainant accordingly and advise him/her to contact the NAEA over the matter.

2 - Effective date of considering complaints.

This is defined as the date from which events complained about can be considered by the OEA. Events before that date cannot be considered by the OEA unless the MA expressly gives his agreement.

For new NAEA Estate Agents

The date of 3 April 2006 is the effective date for all NAEA EAs who were members of the NAEA as of 3 April 2006 – regardless of the date that they actually joined the OEA.  This is because the NAEA took the decision to commit all their EA members (PPDs less RICS) to join as of 3 April 2006. As a result, Complainants will not be denied access to OEA redress because an NAEA EA has not applied to join the OEA when he should have done.

Clearly, for any NAEA EA who subsequently joins the OEA after 3 April 2006 – and does not fall into the category described in the paragraph above - the effective date will be the date he joined the OEA Scheme.

For NAEA Letting Agents

The date of 1 June 2006 is the effective date for all NAEA Letting Agents who were members of the NAEA as of 3 April 2006 – regardless of the date that they actually joined the OEA. This is because the NAEA took the decision to commit all their LA members (PPDs less RICS) to join as of 3 April 2006, and because it was agreed that the OEA start date would 1 June 2006. As a result, Complainants will not be denied access to OEA redress because an NAEA LA has not applied to join the OEA when he should have done.

Clearly, for any Letting Agent who subsequently joins the OEA after 3 April 2006 – and does not fall into the category described in the paragraph above - the effective date will be the date they joined the OEA Scheme.

3 – Lettings

We have produced the following major documents to allow us to start dealing with complaints against Letting Agents from tenants and landlords concerning lettings and property management:

• A Lettings Code of Practice under the OEA and NAEA logos – and which has been approved by ARLA.
• A Lettings Consumer Guide.
• A Lettings Complaints Form and Guidance to Complainants.
• Guidance to Letting Agents.

Most are on the OEA website now – all will be on by mid June.

We are starting to look into letting complaints with the assistance of The Dispute Service (TDS) – who currently also work for ARLA.

It has been agreed that - should a Letting Agent belong to both ARLA and the OEA – it is the OEA which should have precedence in looking into a complaint.

4 – SALES

Fee Earning Events

In my Annual Report, I gave my views on what I considered to be fee earning events (introduction and negotiation) – and gave examples of what I would consider as a positive and provable actions. This is what I said:

“But what is an introduction? To my mind, it must constitute some positive and provable action that has directly led to the buyer becoming interested in the property – for example, a viewing – the details of which should be recorded; and a direct request for specific sales particulars (ie in writing or by coming into the branch office) – again, the details of which should be recorded.  Anything else – such as a mass mail shot, the unsolicited handing out of sales particulars, or a potential buyer seeing a “for sale” board – is more difficult for an agent to prove and, in itself does not, in my view, constitute a positive introduction. 

And what is negotiation? To my mind there are two particular situations which I would regard as qualifying as positive negotiation with the buyer on behalf of the seller: firstly, receiving an offer direct from the buyer and forwarding it to the seller; and secondly, receiving notification by the seller of an offer from the buyer and being asked to follow it up from there. In both cases, in order to establish a claim to have carried out “negotiation”, I would expect the agent to: confirm with the seller whether the offer received was acceptable; take reasonable initial steps to find out the buyer’s source of funding; discuss timescales and other terms and conditions of the sale with the buyer and seller; confirm the sale by issuing a memorandum of sale to both parties and their solicitors; conduct any subsequent negotiations with the buyer of behalf of the seller; take further reasonable steps to look into the progress of the buyer’s ability to fund the purchase, and report accordingly to the seller; and generally monitor the progress of the sale, reporting to the seller on a regular basis, and helping where necessary.  All of this would have to be supported by written evidence – for example, in the contemporaneous entries in the progress notes in the agent’s file.

Whether an agent’s entitlement to a commission fee is based on an introduction or negotiation (or both) I expect him to be able to clearly demonstrate that his entitlement is based on a positive and provable fee-earning event”

I have subsequently received a number of letters from Member Agents giving their views on the matter – and their views on my views. I welcome such feedback which I have passed on to the Chairman of the OEA to raise any matters he considers relevant through the medium of the OEA Board which represents Member Agents’ views.

However, a common misunderstanding in those letters is that I will only take as positive and provable actions those examples that I referred to. That is not necessarily so. The point I was making was that such examples of positive and provable actions of fee earning events are those that I would accept - but there may well be others. In coming to my judgement on the matter, I could come to a conclusion that something less positive may constitute an effective introduction or negotiation – but it will be more difficult for an Agent to prove.

Dual Fee Situations

I also covered this issue in my Annual Report – ending up by saying:

“I would like to see greater efforts between agents (particularly when both are OEA members) to try and achieve some sort of pragmatic fee-sharing arrangement in such circumstances”

I again urge all Agents to try and work with their colleagues in trying to resolve the common problem of two Agents becoming involved in the same sale. Provided that both Agents give the proper “health warnings” as required by the OEA Code of Practice – and please note that the next version of the Code will require Agents to take even greater care in explaining this carefully – the number of such occasions will be fewer, and the fault will be more obviously that of the seller concerned. 

However, in my experience, Agents do not, in the main, do this very well, and the impact could be very much lessened by taking a pragmatic view - whereby the first Agent was entitled to a fee because of the Introduction, and the second Agent because of the Negotiation. An amicable agreement to share the fee would, I believe, work out to both Agents’ advantage in the long run; and would avoid an unseemly squabble between two Agents which could easily – regardless of the facts - be misinterpreted by those in the Press on the look-out for examples of bad practice by “rogue agents”.

Stephen Carr-Smith

Ombudsman

Membership

As of May 1 this year, 1,427 companies belonged to the Scheme, encompassing 5,534 offices.

This represents 52.2 per cent of the 10,600 estate agency branch offices in England and Wales, or 46.1 per cent of the 12,000 estate agency offices across the UK.

The membership department is working hard on the influx of new membership applications following the joining of NAEA members (see below). So far, 534 firms covering 697 branches have sent in their completed applications and these are now being processed.

NAEA members joining the OEA

With effect from April 3, members of the National Association of Estate Agents (NAEA) who are principals, partners, or directors of a firm of estate agents but not members of the Royal Institution of Chartered Surveyors (RICS) are required by a resolution of the NAEA council passed last summer to become members of the OEA.

I anticipate that this will eventually lead to 65 per cent of estate agents in England and Wales, quite possibly more, becoming OEA members. Obviously, this is not going to happen overnight and it will take the membership team at head office some time to integrate the many new members.

Lettings agents joining, too

The OEA has started to receive applications from lettings agents, meaning that for the first time this important part of the estate agency sector will be covered by an Ombudsman scheme.

Registrations started with effect from April 3 and the Ombudsman will start taking complaints from tenants and landlords from June 1. Initially, the OEA will be using The Dispute Service to assist with letting and property management complaints.

By the end of April, 145 registration applications had been received from specialist letting agents and 308 from joint estate / letting agents.

Meeting with the OFT

The Ombudsman and myself had a meeting with the Office of Fair Trading recently at which we discussed a desire by the OFT to allow sellers the legitimate right to set-off some or all of an agent’s fee if the agent has provided an unsatisfactory service.

The OEA has always taken the view that, whilst there should always be scope for negotiation, an agent’s fee is a matter of contract and deficiencies in the level of service should be dealt with by the Ombudsman making an award for financial compensation if appropriate. The OFT lawyers have conceded that the OEA position is quite reasonable.

Code of Practice Review

As you may know, the OEA Code of Practice is regularly reviewed, and this process has been going on over the last few months.

The Council has been consulting with consumer, trade, and Government departments and is now close to reaching agreement on the wording of the updated code. When the review is concluded, the revised code will be available to members and will come into force later in the year.

The objective is to make the code clearer and it will closely follow the sequence of a sales transaction.

New Welcome Pack

The Welcome Pack sent to new applicants to join the OEA has now been revised and made clearer.

There are new information sheets covering the OEA terms of reference; dealing with vulnerable customers; guidelines for in-house complaints handling; procedures within the OEA office; and guidelines for member agents on the OEA process.

OFT Code of Practice endorsement

As you will know by now, either through reading the trade or national Press, the Office of Fair Trading (OFT) has given Stage 2 approval to the OEA Code of Practice to which all OEA members adhere.

This is an important step for the OEA scheme and means that all OEA members will become entitled to display the OFT Fair Trader logo as well as the familiar OEA triangular symbol.

However, using the OFT logo cannot be done until each individual OEA member has signed the OFT licence agreement. It’s important that you do this straight away if you have not already done so. Contact the membership section for a copy of the agreement.

OFT Code of Practice promotion

The OFT has committed a £150,000 budget to promoting the OEA and OFT link-up. In effect, the Government is spending its money on promoting your business for you, but only if you have signed up to the agreement that allows you to display the OFT logo.

It’s not every day the Government spends money subsidising your business, so take advantage of it now.

Which? Endorses OEA members

As you may have seen in the Press, Which? Magazine has endorsed the OEA and recommended that people planning on using the services of an estate agent should use an OEA member.

This follows on from a report in Which? last May which resulted in the OEA threatening the magazine with legal action. Following protracted negotiation, Which? has apologised to the Ombudsman personally and issued its endorsement.

I look forward to renewed good relationships with Which? It is in all our interests to work together to raise professional standards within the industry and wherever we can we will cooperate with Which? on this.

The value of our regular surveys

I suspect that many of you must wonder on the worth of the exercise when Referenceline contacts you in order to set up customer feedback surveys.

But as results of the surveys show, more than 90 per cent of customers would recommend their estate agent to others if the agent is a member of the Ombudsman for Estate Agents and we are able to use such positive statistics to gain publicity for the OEA and its members.

An overwhelming 93 per cent of the 1,600 who responded to Referenceline between last August and January said they would recommend their agent to others and the survey shows that 86 per cent of the 8,700 who have replied since the surveys began in 2003 are satisfied with the service they receive.

The same percentage agrees that their agent complied with the OEA Code of Conduct that was recently endorsed by the Office of fair Trading under the Consumer Codes Approval Scheme, so there’s room for improvement by some of you here.

My new PA

Those of you who ring my personal office will be pleased to note there is a much more warm and friendly, but familiar, voice answering the telephone.

Janet Fitzpatrick, who will be known to many of you through her work on OEA membership at head office, has moved across from Salisbury to Romsey to help lighten my workload and bring a sense of order to the office.

Improvements are already noticeable after only a very short time.

Bill McClintock,

Chairman, OEA Board.