PIQs could expose agents to damage claims, say lawyers

A practice specialising in property law has warned that the addition of the new Property Information Questionnaire to HIPs next week will create a legal quagmire.

Fridays Property Lawyers claim that PIQs have legal ramifications even before a contract has been agreed.

If a prospective buyer has run up costs on the basis of inaccurate information, he or she might launch a civil action to claim for costs.

Director Simon Seaton said: “The PIQ is going to be a minefield for vendors and agents alike. It asks the vendor difficult, and often subjective, questions, the answers to which are then actionable if a purchaser considers them to be misleading.

“If the agent has provided any advice at all on filling in the PIQ, the agent can be joined in the action.

“The really big departure is that a ‘purchaser’ does not need to have purchased before taking action – he can sue without having committed even a deposit.”

Seaton said that effectively the PIQ enables, in certain circumstances, legal action to be taken before any contract is signed, as the form is intended to give the prospective buyer enough information to take preliminary steps towards purchase of the property.

Such steps would include engaging a conveyancing lawyer, arranging finance and obtaining a valuation.

Seaton advised agents to refuse to get involved in advising on the PIQ. He said: “If you thought conveyancing lawyers were a necessary evil, they are angels compared to litigators.”

But, he warned, a refusal to help could alienate clients while also significantly slowing the process of completing a HIP. Agents are not liable if the form has been solely completed by the seller. Any advice on the PIQ provided by agents could leave the agency exposed to civil liability as outlined above, as well as liability under the Property Misdescriptions Act 1991.

Fridays is also calling for sellers facing possible repossession to be allowed to market their properties from day one – despite next week’s change in the law.

Seaton said: “Most sellers facing repossession are not able to afford the outlay for the HIP but, on the other hand, they need to market their property as quickly as possible to stave off repossession.

“The impact of the removal of first day marketing from April 6 is yet another body blow for them.”

He urged the Government to consider making an exception to first day marketing where the seller is under threat of repossession proceedings by their lender, by way of a slight amendment to the regulations.

He added: “With at least two million people coming off cheaper fixed-term deals this year and with many likely to struggle to find another mortgage, it is essential that ministers offer as much relief as possible to those most vulnerable. Such an initiative wouldn’t cost the taxpayer a penny.”

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Fridaysmove
1st April 2009

Estate agents new work ethic

At a party hosted by a large estate agency recently, there was a small but telling exchange. The director had recently instructed his staff that days away from the office shooting, watching polo or generally carousing, were now to be taken as leave rather than seen as a perk of the job.

"It's so not fair," grumbled his minion. "It's a way of making contacts."

"No, it's a way of taking a day off," said his boss sternly. "You want to shoot, you do it in your own time."

There was pouting and muttering before a compromise was reached: bring back two leads from a shoot and it would be declared a work day, otherwise it was coming out of an agent's annual leave allowance.

It may not be the hard-nosed office culture that those who work in many other industries recognise but, in terms of estate agency, the message was clear: we need results and we need to be seen to be working to get them. And of course, the threat of redundancies is now ever-present: research for The Daily Telegraph by the National Association of Estate Agents calculates that the number of estate agents in work has fallen from 80,000 in the summer of 2007 to 48,000 by the end of last year.

"The trouble with estate agency is that it was for a long time a harbour for Johnny Redbrace who wasn't quite bright enough for the City and failed to get into the Army and thought it would be a jolly nice thing to have a crack at," says Andrew Scott, a partner at Strutt & Parker. "It was an industry that was populated by people who didn't work very hard – up until the middle of 2007 you could drive a nice Mercedes and take holidays in Barbados just by turning up. You didn't really have to do anything."

Scott is unusual (but may not be alone) in displaying a certain relish for the current downturn. His theory is that it drives out Johnny Redbrace – and his more cunning colleague, Larry Lizard – and helps to turn the business into a profession. He did, after all, haul the newly established S&P London office through the last recession and says, with some glee, that eight competitors within 100 yards of his office went under in that period.
 

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Angela Pertusini, Telegraph
 11th February 2009