The Department for Business, Innovation and Skills is seeking views on proposals to repeal the Property Misdescriptions Act 1991.
Note added: BIS announced the government’s intention to repeal the PMA 1991 on 14 September 2012, see Consultation paper on the repeal of the Property Misdescriptions Act 1991, January 2011 (BIS): government response. (Free access.)
The Department for Business, Innovation and Skills (BIS) is seeking views on the possible repeal of the Property Misdescriptions Act 1991 (PMA 1991). The protection given to housebuyers by the PMA 1991 overlaps to a large extent with that given by the Consumer Protection from Unfair Trading Regulations 2008 (SI 2008/1277). BIS believes that this duplication places an unnecessary regulatory burden on businesses without giving any additional protection to consumers.
The consultation will be of particular interest to estate agents, auctioneers and property developers. The closing date for responses is 5 April 2011.
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Close speedreadThe Property Misdescriptions Act 1991 (www.practicallaw.com/0-380-7392) (PMA 1991) came into force on 4th April 1993. Under the PMA 1991, it is an offence for estate agents or property developers in the course of their business to make false or misleading statements about property offered for sale.
A statement is false if it is "false to a material degree" (section 1(5)(a), PMA 1991).
A statement is misleading if (though not false) "what a reasonable person may be expected to infer from it, or from any omission from it, is false" (section 1(5)(b), PMA 1991).
The Property Misdescriptions (Specified Matters) Order 1992 (SI 1992/2834) prescribes 33 specific matters about which false or misleading statements must not be made. These include matters such as:
Location or address.
Aspect, view or outlook.
Measurements and sizes.
Physical or structural changes.
For more information on legislation affecting estate agents, see Practice note, Residential property and complaints about estate agents (www.practicallaw.com/4-382-9877).
The Consumer Protection from Unfair Trading Regulations 2008 (SI 2008/1277) (www.practicallaw.com/6-381-7656) (CPR 2008) implemented the Unfair Commercial Practices Directive (2005/29/EC) in the UK and came into force on 26 May 2008.
The CPR 2008 prohibits unfair business-to-consumer commercial practices in all business sectors, before, during and after a transaction. They require businesses not to mislead consumers through acts or omissions or subject them to aggressive commercial practices.
The powers available to trading standards officers under the CPR 2008 are broadly similar to those under the PMA 1991.
For more information, see Practice note, Consumer Protection from Unfair Trading Regulations 2008 (www.practicallaw.com/2-381-1492).
The Department for Business, Innovation and Skills (BIS) is seeking views on the possible repeal of the PMA 1991. The PMA 1991 and the CPR 2008 overlap to a large extent in the protection that they give to housebuyers. BIS considers that this duplication places an unnecessary regulatory burden on businesses without giving any additional protection to consumers.
The consultation paper reviews the similarities and differences between the PMA 1991 and the CPR 2008 and concludes that, in the majority of cases, an offence under the PMA 1991 would also be an offence under the CPR 2008. As the government believes that the CPR 2008, therefore, provides broadly the same protection, the government's preferred approach is to repeal the PMA 1991.
Enforcement agencies are currently more familiar with the PMA 1991 and there is presently little case-law relating to the CPR 2008, which are still relatively new. The Office of Fair Trading has offered to provide guidance for enforcement authorities and estate agents on how the CPR 2008 applies to the sale of property, if the PMA 1991 were to be repealed.
The consultation will be of particular interest to estate agents, auctioneers and property developers. The closing date for responses is 5 April 2011.