**Updated 14th May 2014**
The Property Ombudsman launches Code of Practice for newly-formed The National Association of Property Buyers
New national trade association created to raise standards in the ‘Quick House Sale Sector’ following OFT Market Study
Some of the UK’s largest and best-known property buying companies have collaborated with the Property Ombudsman (TPO) to create a new Code of Practice to address the issues raised in the Office of Fair Trading’s (OFT) market study into the ‘Quick House Sale’ sector.
The OFT study into companies that purchase properties directly from consumers strongly recommended the sector adopt a form of self-regulation, which spurred several property buying companies to become founding members of a new trade body, the National Association of Property Buyers(NAPB).
Property buying companies wishing to join the NAPB must register with TPO, the UK’s largest property redress scheme which has 28,500 offices registered, and follow a new Code of Practice that will come into force on 1st July 2014 to ensure:
• All NAPB members follow the same professional standards, as outlined in TPO’s new Code of Practice.
• Home owners are treated fairly and are able to make an informed choice about how to sell their home.
• Consumers using a NAPB agent can access TPO’s free and independent dispute resolution service in the event of a complaint arising.
Jonathan Rolande, NAPB’s founder member, said: “The NAPB is the first and only trade association of its kind representing this market sector. Property buying companies have existed for decades but they are still relatively unknown in the eyes of consumers, compared to the fields of estate agency and lettings. Our aim with NAPB is to raise standards and educate so homeowners know what to expect when considering a quick property sale.”
While the OFT study (published in August 2013) identified that the quick house sale sector was dynamic and innovative, which offered benefits to home sellers who want a quick, guaranteed and hassle-free sale, the report also highlighted a number of concerns, which the nine founding members of the NAPB wanted to address.
Jonathan added: “By having every NAPB member registered with TPO, we can offer consumers that all-important peace of mind to assure them that their property buying agent is committed to following a stringent set of professional standards that comply with the relevant property and consumer laws, with the added comfort of knowing they can have a complaint independently reviewed by TPO in the event of a dispute ever arising.”
At the time of the OFT study being published, it was estimated that there were approximately 9,000 quick house sale completions in the UK .
Christopher Hamer, the Property Ombudsman, said: “The OFT’s Market Study provided a real insight into the sales practices of property buying companies. It is a credit to those firms that have set up the NAPB that they have taken action to address the findings and worked with TPO to create a new Code of Practice and facility for consumers to access a free, independent dispute resolution service.
“Having met with the OFT on several occasions to discuss the standards and safeguards included in the new Code of Practice, the NAPB’s decision to make it compulsory for all members to register with TPO is a testament to their commitment to self-regulate and offer consumers accountability.”
Please note: The OFT provided a statement TPO’s new Code of Practice and the launch of NAPB, which is available to download via here (In April 2014, the Competition and Markets Authority became the UK’s lead competition and consumer body, which took over certain consumer protection functions after it closed earlier this year).
The founding members of NAPB:
• House Buy Fast
• Property Rescue
• Home Buyer Bureau
• National Property Trade
• Homes Bought Fast
• Trading Homes
• Quick Move Now
• We Buy Any Home
What is The Property Ombudsman (TPO)?
The Property Ombudsman scheme has been offering an independent and impartial dispute resolution service to consumers who are dissatisfied with the service provided by registered firms since 1990. The Ombudsman can provide redress to place the consumer back in the position they occupied before the complaint arose to achieve a full and final settlement of the dispute and all claims made by either party. Where appropriate, the Ombudsman can make compensatory awards in individual cases up to a maximum of £25,000 for actual and quantifiable loss and / or for aggravation, distress and inconvenience caused by the actions of a registered firm.
TPO is free to all consumers. Agents pay a single annual subscription covering them for sales, lettings, commercial, international and auction activities. TPO does not charge case fees.
The Property Ombudsman currently provides redress for consumers using 28,500 offices in the UK (inc. 12,367 residential sales estate agency branches and 11,259 residential lettings offices).
Whilst TPO charges registered firms an annual subscription, the Ombudsman is accountable to the TPO Council, the majority of which is made up of non-industry members. The Council appoints the Ombudsman and sets his Terms of Reference (i.e. how the complaint process operates). The Ombudsman is required to report to the Council on a regular basis.
The Ombudsman is not a regulator and does not have the authority to take regulatory or legal action against a registered firm. However, member firms can be referred to the TPO Disciplinary and Standards Committee, appointed by the Council, which has the power to expel firms from the scheme and / or report them to the Office of Fair Trading, which has the ability to ban firms from carrying out estate agency business.
The Ombudsman’s Terms of Reference, the Codes of Practice, Consumer Guides and other documents about the operation of the scheme are available on our website (www.tpos.co.uk), together with previous annual and interim reports, further explanation of governance arrangements and a full list of registered firms.
For more information about TPO, please visit our website at www.tpos.co.uk
On the 3rd of June 2013 the Office of Fair trade started the process of investigating the quick house sale sector at a round table meeting attended by the key businesses within the industry. It was a very open debate at their offices off Fleet Street and made for a thoroughly enjoyable couple of hours.
The OFT hosted an opportunity for the main players in the industry to contribute their views on what the “right picture” looked like from the vendor perspective. Around the table we debated the issues vendors face in the industry especially from unscrupulous buyers who mislead and mistreat our sectors consumer or property sellers. From my point of view, the OFT were particularly positive and stressed the importance of a quick house sale sector especially highlighting the benefits that sellers gain from having the option to sell to a quick cash buyer.
The general views in the room were that both consumers and quick property buying companies would benefit from a voluntary code of standards allowing mistreated vendors to find redress through a body or industry association. This would involve not only clear operating standards but also emphasised the importance of educating vendors on elements of property law. In doing so they can fully understand their position in a property transaction and consequently perhaps those more vulnerable vendors can make a better informed decision for their situation.
In August 2013 The Office of Fair Trading (OFT) concluded that some quick house sale companies, such as National Property Trade, offer a genuine and useful service to those people who need to sell their property in a short time frame.
Gaucho Rasmussen, OFT Director, said: “Responsible quick house sale firms offer a valuable service to consumers who want a fast sale”
The OFT subsequently announced in they were investigating four quick house sale companies and have since in December 2013 that Four companies, Gateway Homes UK, Property Rescue Ltd, Box MX and BTA Properties, have ‘agreed to improve their practices’ and Gaucho Rasmussen, Director at the OFT states “it is our intention that other businesses within the sector take note of our investigation and the advice we have provided and review their own practices.”
Where are we now?
Fast forward to January 2014 and we are delighted at the level of cooperation our industry has shown by working together on this solution under the OFT recommendations. Following several subsequent meetings with the Property Ombudsman and the founding members of the soon to be formed National Association of Property Buyers and we are very enthusiastic with the progress that has been made. The fantastic news for consumers and businesses in our sector is that we have agreed an industry code of standards which The Property Ombudsman has agreed to adapt. This will allow property buyers to join The Property Ombudsman voluntarily. It is a real positive story for the quick house sale sector which clearly benefits not only our industry, but most importantly those consumers looking to sell their house to a reliable house buyer.
What does this really mean for a property seller?
It means that all sellers seeking a quick sale may now engage with a House Buyer who is a member of the TPO and therefore subscribes to the “OFT” recommended code. If during the course of a sale the seller has any issue, complaints or problems dealing with a House Buyer they can make a complaint to The Property Ombudsman. The “TPO” are perhaps best known for overseeing Estate Agencies in the interests of the general public. Estate Agents are obliged to join under the Estate Agency regulation. Although House Buyers are not obliged to join consumers will at least have a clear choice. And if a house buyer is not a member they can then choose to approach one who is. All House Buyers who are members of the TPO must have legal indemnity insurance which means as a consumer you will have financial cover for any loss you may incur if you have been mistreated.
The future for the quick house sale sector?
Many sectors evolve at difference market periods and the emergence of the Cash Buyer or House Buyer as a mainstream alternative has been somewhat recent although Cash Buyers have been around perhaps as long as property itself. Over the last ten years especially we have seen a quick sale to a House Buyer as a real alternative to the open market. In some cases where houses can take some time to sell via an estate agent where buyers can be notoriously unreliable some vendors turn to a House Buyer to find a reliable solution. Perhaps selling via an auction is a more recognised option for some sellers in this situation, House Buyers are positioned very much as an option in this situation. Even selling at an auction isn’t a guaranteed sale and quite often a House Buyer will offer the same price or in some cases more than can be achieved at an auction, for a guaranteed sale without any upfront costs or risk.
Overall we are very positive about the investigation and the outcome being the agreed code, the imminent Association of House Buyers and subsequent membership of The Property Ombudsman. It’s a defining moment for the future of our sector, very much a step forward where every seller can consider selling to a House Buyer without any reservations.
Cormac Henderson CEO of National Property Trade, a founding member of the National Association of Property Buyers.
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