ESTATE AGENTS REGULATION BILL (Hansard, 23 July 1974)

§ Mr. Norman Fowler (Sutton Coldfield)

I beg to move, That leave be given to bring in a Bill to regulate certain practices of estate agents and agents for business transfers. In view of the next business, I will try to make a short speech but I emphasise that this is an important area. The aim of the Bill is to give the public added protection when selling or buying houses or other property. It recognises that a house is the chief investment of most members of the public. My case is that added protection is needed if the public are to receive the full benefit of that investment.

The Bill is in no way an attack on the many reputable estate agents who practise in this country. Many are members of professional societies and have their own professional codes of conduct. There are others who, although unqualified, provide a good and honest service. But the Bill recognises that there is a small minority who abuse their position and bring the whole profession into disrepute. The aim of the Bill is to prevent the public from suffering at the hands of this minority.

My attention has been drawn to this area by a number of cases concerning my constituents and cases reported in the Birmingham Evening Mail. They are local cases, but together they make out a case for reform in this area. This debate may lead to further cases coming forward, and if so I will certainly do my best to see that they are investigated.

The first case concerns a constituent, Mr. Frank Podmore, who wanted to sell his semi-detached house. He consulted his employer and the latter answered an advertisement by an estate agent, Eric Timms, of Corporation Street, Birmingham, who said that he urgently required older property. Mr. Timms visited the property in Sutton Coldfield and a discussion later took place in the office of Mr. Podmore's employer. The employer had to leave the office for five minutes, and when he returned he found that Mr. Podmore had agreed to sell the property and had signed a scrap of paper which was an agreement to sell the house to Mr. Timm's son for £500.

1308 This was considerably below the market price, but as Mr. Podmore explained: When I was alone in the office, Mr. Timms and his colleagues said that I had a bad house and it would cost a lot of money for demolishing and rebuilding in place. They talked about how much my parents paid for it, about £400. They said they could not offer more than £500 and I foolishly signed the paper. I was fed up with the worry of it. I am glad to say that this case has now been settled, but only after a series of articles in the Birmingham Evening Mail and legal action. As a result, Mr. Podmore has now sold his house for £4,500, or nine times what he was originally offered.

The second case was reported in the Birmingham Evening Mail on 19th July. A Birmingham insurance inspector placed an advertisement to sell his maisonette on a Friday evening. He was visited the same evening' by a representative of Newent Properties who asked whether it could sell, his house. The inspector thought he might eventually need the services of an estate agent, so he signed. But the next day he sold his house to a member of the public answering the advertisement.

On the Monday he rang Newent Properties, and said that he no longer needed its services, but the firm told him that he owed it £150 commission. He had unhappily signed a sole selling rights agreement which entitled the firm to a commission irrespective of who sold the property. But there was one thing—he had at least completed a sale.

In the third case, a member of the public came to my advice surgery. He had wanted to sell his business, a small general store, and entered into an exclusive three months' contract with the firm of F. E. Royle of Princes Chambers, 6, Corporation Street, Birmingham. A would-be purchaser came along who paid a deposit to Mr. Royle. However, the would-be purchaser withdrew and the property remains unsold, through absolutely no fault of my constituent, who still wants to sell this business.

Unhappily for him, however, he had signed not only a sole selling rights agreement but an agreement which bound him to pay the full commission once a deposit had been paid. Thus, Mr. Royle is now claiming a commission of £167, in spite of the fact that the business remains 1309 unsold, on the ground that a deposit was paid.

The House will doubtless note that there is a certain similarity between the second and third cases. It will not come as a surprise, therefore, to learn that F. E. Royle is the sole agent for Newent Properties. The standard contract of F. E. Royle, which has been given to me, gives that firm, first, sole selling rights for three months and, second, a right to a commission whenever a contract to purchase has been signed or a deposit paid. The contract warns that anyone imitating its form will be prosecuted. If nothing else, I am sure that the public are very grateful for that assurance.

These are three cases in just one city. I cannot imagine that Birmingham is alone in this. One of the major reasons why these cases have become public is the efforts of the Birmingham Evening Mail. I pay tribute to its reporting, which has been in the best traditions of British journalism.

My Bill will seek to ban the kind of practices that I have described. It is already the case that a member of the Royal Institution of Chartered Surveyors, for example, would be subject to disciplinary proceedings in any of the three examples that I have given. In the first case, a member of the RICS dealing on his own account would be required to warn the would-be seller to take legal advice before agreeing to the sale. In the second case, a member of the RICS is prohibited from doorstep touting; and the institution also strongly deprecates sole sale rights agreements. In the third case, a member of the RICS would not claim commission when a deposit had been paid but only if a sale had actually been completed. My belief is that conditions of this kind should be made general to all estate agents.

The Bill seeks to encourage professional estate agents and estate agents with high standards, but to drive out the rogue estate agent who tries to exploit the public. I am conscious of the many attempts that have been made in the past to secure registration of estate agents but without success. I am also conscious of the fact that this Bill, coming so late in the Session, will not reach the statute book. But my aim is to point out that the arguments that have led to attempts 1310 being made in the past, including the attempt by one of my hon. Friends, to whom I pay tribute, still apply and there is a case for action and urgent action.