ESTATE AGENTS (AGREEMENTS) (Hansard, 8 March 1977)

§ Mr. Cyril Smith (Rochdale)

I beg to move, That leave be given to bring in a Bill to provide protection for the vendors of real property when placing their property in the hands of estate agents, particularly, but not exclusively, those agents who advertise on a no-sale, no-fee basis. I wish to make two comments at the outset of my remarks. This Bill is introduced as a consequence of the experience of one of my constituents. I wish to make it clear that I do not believe that every estate agent is a disreputable shark. As in every area of activity in life, there are disreputable people and there are smart-alec estate agents. However, no reputable estate agent who acts honestly and fairly has anything to fear from my Bill. I take the view that the House should seek to defend individuals against dictatorial bureaucracy and should also defend consumers against the clever smart-alec who is out to earn quick money at the expense of others.

The case of my constituent is a simple one. He decided to emigrate and went to see an estate agent who advertised my constituent's property on the basis of no-sale, no-fee. The constituent agreed that the agent should try to sell his house on that no-sale, no-fee basis. The agent then produced a document and told my constituent "Sign here". My constituent signed the document after questioning the no-sale, no-fee part of the advertisement. My constituent's house was then advertised for two Saturdays only and on one of those days at least the advert was wrong.

The vendor then changed his mind and decided not to sell because he could not obtain his papers to emigrate. He then phoned the estate agent to withdraw the sale of the house. Nobody from the agency had visited the house, and there had been no notice in the garden or anything of that kind. All the agent did was to place two advertisements in a newspaper, one of which, as I have said, was in error.

The vendor was then told that he had "broken the contract" and received a bill for £44.42p, being £3.29 VAT and—wait for it—£41.13p fees. Incidentally, the 1235 account refers to "half fees as per contract". After a little delay, my constituent received a copy of the contract eight months after he had initially signed it. He then realised the situation—despite the fact that the estate agent's advertisement said that there would be no fee without a sale, and indeed the advertisement which I have in my hand said "No sale—no fee or expenses at all", and the other advertisement said, "No sale, no fee or expenses at all—even Press advertisements". Although that was the basis on which the agent had advertised, my constituent realised that those conditions apply only if a property is left with that estate agent exclusively for six months. Because the vendor withdrew the property in a shorter period than six months, the estate agent could proceed legally to claim his fees. I shall not weary the House with all the details of the case, but I merely sum up the situation by saying that ultimately the estate agent took out a summons against the vendor for £48.92p, which included £4.50p court fee.

I feel that this matter requires to be remedied by legislation. Therefore, I seek leave to introduce this Bill to ensure that such a thing cannot happen again.

My Bill proposes, first, that any agreement by an estate agent to sell a property for a vendor shall have a written contract, even if the agreement is a verbal one. Secondly, the estate agent shall serve upon the vendor within seven days of such an agreement a copy of the agreement, and notice of the vendor's rights under the rest of the Bill is to be included with the copy supplied to the vendor. If the estate agent does not comply with that rule, no agreement shall be enforceable by him.

Thirdly, under the Bill the vendor is allowed from service of the copy agreement on him 10 days in which to terminate the agreement, without liability. That is similar to the cooling-off period in a hire purchase agreement.

Fourthly, the Bill provides that where the estate agent advertises on a no-sale, no-fee basis, he shall not be able to charge a fee if no sale is effected and notwithstanding anything in the contract.

My Bill defines "the vendor" and defines the "estate agent" as any person or legal personality which undertakes the sale of real property for reward 1236 Where that real property is used for purposes of residence". This Bill has been drafted for me by a good friend, Mr. Alistair Webster, a young Rochdale barrister of great ability. I assure the House that the Bill will be published, assuming that leave is granted by the House today.

My constituent who came to see me was a Mr. Newall, of 570, Manchester Road, Rochdale. The estate agents involved, to whom I have spoken, were Kendal Estates Ltd.

I do not believe that there is anything in the Bill to cause offence to decent, honest, fair-minded people. I cannot believe there is anything in it to cause concern to decent estate agents—although I must say, judging by my correspondence, that some of them flutter and splutter if they think an attack on their citadel is about to take place.

I hope that the Government will find it possible to give time to my Bill. It is a consumer protection Bill, and I have very much appreciated the interest taken in it by the Minister of State, Department of Prices and Consumer Protection. The Minister has taken a voluntary interest in my Bill.

I see my Bill as a first step in an area of activity that requires action and investigation. I believe that some of the fees charged are exorbitant. They should be related to work done and not to sale price.

This is a decent little Bill to help the consumer and to ensure that if he is taken for a ride by an estate agent he has nobody to blame but himself. I hope that the House will agree to its introduction.