BrightSale Research Department

PMA 1991 - Stop Mis-describing the Misdescriptions Act! - June 2008

Traditional high street estate agents are adept at inventing justifications for their role. And who can blame them, especially in such difficult market conditions? We are in favour of open and fair competition between different business models: high fee, branch-based agency on the one side and lower fee, internet-focused agency on the other. Let's give the consumer a fair choice, compete on a level playing field, and we'll all live with the results.

What is not fair is traditional agency's misinterpretation of the law to justify their costly and cozy business practices, to the detriment of online estate agents. And of course the biggest culprit is the oft quoted, and oft mis-quoted, Property Misdescriptions Act 1991. The Act is well-named, because there cannot be a more widely "misdescribed"" piece of legislation on Britain's statute books.

Rather than pander to popular mis-conception, when we launched BrightSale in early 2007 we paid a substantial fee to a top London law firm to give us a proper and rigorous analysis of what PMA 1991 really means, and what requirements it really places on estate agents. We also asked the lawyers to review BrightSale's business practices in full to ensure that we were fully compliant with all relevant UK and European legislation. (We would be delighted to share the opinion - from Olswang Solicitors - with anyone who is legitimately interested). We thought it was important to get a proper legal opinion, because we suspected that much of what we were being told about PMA 1991, in particular, was self-serving nonsense.

The typical, and completely erroneous, 'interpretation' of PMA 1991 by traditional agents is that online estate agents do not "comply" with PMA 1991 because they do not guarantee to visit every property on their books.

How convenient that this 'interpretation' of the law invents a central role for the local high street estate agent. Note the slight of hand in the logic also - PMA 1991 requires estate agents to do this and to do that, and if they don't they break the law. This misinterpretation has led to farcical outcomes. We are aware that one online agency 'complies' with PMA 1991 by pretending that the floor planners and photographers that it sends to the properties actually work for the agency. This leads to comic conversations when the vendors ask for valuation advice from the man with the camera, who may not have been within 50 miles of the property in his life before - and certainly has no knowledge of estate agency or the current market in that area! How is that helping to prevent property misdescriptions?

The truth is that PMA 1991 does not require estate agents to 'visit properties' or to or anything of the sort. In fact, it doesn't require agents to do anything full stop. Olswang Solicitors explained what PMA 1991 means in simply terms for us:

"The first point to make is that it is not strictly accurate to talk about 'complying with' the PMA 1991. It is not a statute which requires any specific steps to be taken. It is a statute which prohibits the making of false or misleading statements in the course of an estate agency business or property development business."

We specifically asked Olswang to consider a situation in which an online estate agent like BrightSale published property descriptions which had been supplied by a vendor and then subjected to verification via a telephone call. The law firm was very clear on whether or not this was likely to be acceptable to a court or not:

"I think it is reasonable for BrightSale to rely upon information supplied by the vendor. BrightSale's procedures involve the question and answer session which enables BrightSale to assess whether the vendor can be relied upon to provide reliable information. Provided BrightSale has no reason to disbelieve the information which it is being given and bearing in mind the fact that the disclaimer expressly notifies potential purchasers that BrightSale has not carried out a survey (and that the particulars are for general guidance only) it seems to me that BrightSale would be in a strong position to establish the defence of due diligence."

The position of disclaimers is very important here. BrightSale is careful to alert applicants that its agents may not have physically visited every property. We make every effort to verify and check information, and after that we are open and honest with viewers that we may not have physically verified the information via a visit.

As an aside, we would also note that 1991 was a long time ago. In the pre-internet era applicants were indeed wholly reliant on what estate agents told them about properties. Today the situation is very different. A typical BrightSale property will have perhaps seven or eight internal and external photos, a professionally drafted floor plan and a full Home Information Pack to support and substantiate the written description. A Google map will verify the location, and numerous online valuation metrics are available to help both BrightSale representatives and potential buyers check the validity of the price.

The world has moved on, and it is time for traditional agents to stop misdiscribing the Misdescriptions Act to try to deter competition from online agencies. We believe that such action is anti-competitive, unfair and as we have seen above, has absolutely no basis in English law.