Buying a property is the most expensive purchase in most people’s lives, so it is really important buyers are aware of the most important details about a property before proceeding and making that all important offer.
Under the Consumer Protection regulations, Estate Agents are under an obligation to ensure they are not omitting material information on property listings, however this was never found to be consistent across the industry. Cue the introduction of Part A the first guidance released by the National Trading Standards Estate and Lettings Agency in February 2022 with Parts B and C following in November 2023.
So what constitutes material information?
This is split into 3 parts:
Part A – this includes following information that would be classed as unavoidable costs regardless of your use of the property such as
– Council Tax band/Domestic rates information
– Rent amounts for rentals
-Deposits payable (if any)
-Tenure: Freehold/Leasehold/Commonhold. Where it is a leasehold tenure that information relating to ground rent, service change and length of lease term.
-Price: for sale properties this is the sale price and for shared ownership properties this will include the percentage share being purchased and rental amount for the remaining share.
Part B – this again is applicable to all properties and should include the following:
-Physical characteristics of a property such as terraced or semi-detached etc
-Utilites including broadband coverage
-Parking
Part C – this is relevant to some properties and will include
-Building Safety
-Restrictions
-Rights and easements
-flood risk/coastal erosions
The purpose of introducing this framework of Parts A, B and C is to allow buyers to make an informed decision based on critical details that are relevant to a property, thereby making transactions speedier. However, it still remains to be seen how much of an impact this framework will have. Especially as not all estate agents are fully compliant with Parts B and C as indicated by research carried out on property listings advertised on Right Move and Zoopla.
So is there a gap in knowledge or an unwillingness to embrace change? Either way Material information is not going anywhere anytime soon.
The Impact
So along with the goal to reduce fall out rates and transaction times, conveyancers can be instructed earlier. Opportunities now arise for creating ‘Sale ready’ listings, which will allow material information to be utilised to provide that all important information required to make a transaction smoother and speedier.
This does however come with some challenges especially for conveyancers and the risks of liability. The Law Society faced the backlash from the profession when it introduced the updated TA6 Property Information Form including material information earlier this year in March 2024- what was to be made mandatory for CQS firms in June 2024 has now been postponed to January 2025 pending further consultation from the profession.
Similar to Home Information Pack providers back in 2007, Material information has created an opportunity for tech providers to offer a similar service. There are many now providing a product offering to estate agents enabling them to be compliant without the extra burden of carrying out this work.
Regardless of the conveyancers approach to the changes The Law Society is trying to impose, we will only see the difference of Material Information when estate agents fully embrace this change and incorporate this framework into their listing.
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