Repeal of the Property Misdescriptions Act 1991
Justin Graves, 2nd October, 2014
The Property Misdescriptions Act 1991 (PMA) was repealed on 1 October 2013 by the Property Misdescriptions Act 1991 (Repeal) Order 2013.
Governance has passed to the more generalised Consumer Protection from Unfair Trading Regulations 2008 (CPR). And Business Protection from Misleading Marketing Regulations 2008 (BPR).
The CPR and BPR have been in force since 2008. But in the property context it is the PMA that has always been relied on to seek redress in misleading marketing cases. The sole application of the CPR and BPR will significantly widen the net of protection. Under the new regime, the offences include:
- Giving misleading information
- Failing to give material information
The CPR and BPR impose an increased burden on estate agents and developers selling properties, as well as the wider housing industry. In particular, the introduction of provisions dealing with omissions will mean that selling and letting agents, house builders and others must be aware of what they don't say about a property as much as what they do say.
The higher standard means that these agents or companies must ensure that they bring any relevant facts or matters to the attention of potential buyers. The ability to rely on the concept of "buyer beware" is reduced. And it may no longer be enough to place the onus on a buyer to carry out appropriate due diligence and raise appropriate enquiries.
Also, the adoption of broader, 'catch all', principles-led legislation (as opposed to a statute designed to regulate property marketing and sales) will mean a period of uncertainty for those in the industry.
At the moment, there’s little case law relating to the CPR. The Office of Fair Trading has provided a guidance note for enforcement authorities and estate agents on how the CPR relates to the sale of property.
CPR has been amended by the Consumer Protection (Amendment) Regulations 2014. However, the new rights introduced do not apply to contracts in respect of immovable property other than those which relate to a “relevant lease”.
The term “relevant lease” is defined to mean:
- An assured tenancy, including an assured shorthold tenancy, within Part I of the Housing Act 1988
- A lease relating to the letting of holiday accommodation
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