Going amiss with property descriptions: part two
On my last appearance here, I took you on a swift trip through the Property Misdescriptions Act 1991; this time, we’ll be taking a meander through the highways and byways of its successor: the Consumer Protection from Unfair Trading Regulations 2008.
What are the Regulations all about?
The first important point to note is that the Regulations are broader than the Act; they cover products and the relationship between a trader and consumer. Their main focus is the prohibition of unfair commercial practices (CP).
And CPs have a pretty large definition including acts, omissions, course of conduct, representations or commercial communication (advertising and marketing) by a trade which is directly connected with the promotion, sale or supply of a product to or from consumers…
It’s probably best to regard yourself as engaged in a commercial practice whenever you’re wearing your business hat. However, as is the case with the Act, a breach of the Regulations cannot be solely responsible for making an agreement void or unenforceable.
CPs are considered unfair if:
1 They contravene the requirements of professional diligence (ie the standards relating to honest market practice and good faith that consumers have a reasonable right to expect).
2 They either materially distort or are likely to materially distort the economic behaviour of an average consumer with regard to the product.
3 Their content or presentation is so false that it would either deceive or be likely to deceive an average consumer into taking a decision he would not otherwise have taken (Regulation 5).
4 They contain misleading omissions in that material information is either omitted, hidden, or presented in such an unclear or ambiguous manner that it is likely to cause an average consumer to make a decision he would not otherwise have made (Regulation 6).
5 Aggressive action may involve harassment, coercion or undue influence
6 They are considered unfair (see separate Schedule 1 for a list of CPs that the Regulations deem to be unfair).
What’s an offence under the Regulations?
You’ll be committing an offence if you knowingly or recklessly engage in CPs which contravene points 1, 2, 4 and 6 above which materially distort or are likely to materially distort the economic behaviour of the average consumer in relation to the product.
What are the penalties for offences under the Regulations?
These are the same as under the Act.
What are the time limits for prosecution?
You can’t be prosecuted after either three years since the commission of the offence or one year since the date of discovery of the offence – whichever is earlier.
Who can be prosecuted?
Legal action can be taken both against the body that commits the offence and against individuals employed by that body such as directors, managers and secretaries.
What’s a valid defence under the Regulations?
There are two: due diligence and innocent publication of advertisement. If you’re relying on the first as a defence, you’d need to prove that you took all reasonable precautions and exercised due diligence, and that one of the following occurred:
2 reliance on information provided by another;
3 act or default of another;
4 accident; or
5 cause beyond control.
If you’re using innocent publication of an advertisement as your defence, you’d need to prove that the party concerned:
1 is in the business of publishing advertisements;
2 received the advertisement in the usual course of business; and
3 did not know nor had any reason to suspect that the advertisement amounted to an offence.
How can you avoid falling foul of the Regulations?
The key point to bear in mind is that the Regulations prohibit the omission of material information to consumers if that omission could cause an average consumer to make a different decision in relation to the product. This places the responsibility to provide adverse information firmly on your shoulders, even though there is no general requirement to disclose information to consumers under the Act, and regardless of whether consumers request it or not.
In the context of property, adverse information could include such matters as adverse surveys and known defects. But all of the safeguards that I referred to in relation to the Act should continue to be considered to help to establish good practice.
That’s it: I’m done with property descriptions, but only temporarily. I shall be taking up the reins again at our free Housing Seminar at the British Library on 18th March. I’d love to see you there; if you have any burning questions in the meantime, simply get in touch.