Commentary on Sections Part 5 - Home Information Packs Section 172: Power to require estate agents to belong to a redress scheme
383.This section provides that the Secretary of State may make an order requiring estate agents marketing homes with home information packs to belong to an approved redress scheme in which particular complaints are investigated by an independent person, known as “the ombudsman” (subsection (6)). Failure to comply with such an order is treated as a breach of duty under Part 5 of the Act. As section 175(1) describes, enforcement authorities must notify the Office of Fair Trading ("OFT") of any breaches of duty committed by estate agents. By virtue of section 175(3), such breaches of duty are treated in the same way as "undesirable practices" prescribed under section 3(1)(d) of the Estate Agents Act 1979 which the OFT may take account of in making an order under that Act prohibiting a person from practising as an estate agent.
384.Subsection (3) provides that, before making an order requiring all estate agents to belong to a redress scheme, the Secretary of State must be satisfied that he has approved one or more redress schemes such that every estate agent (other than one who has been prohibited under the Estate Agents Act) is eligible to join an approved scheme. The approval of redress schemes is dealt with in section 173.
385.Subsection (4) provides that the order may exclude certain estate agents from the duty to belong to a redress scheme. This power could be used to exclude others whose professional activities are already regulated. For instance, solicitors who act as estate agents should already be subject to the remit of the Legal Services Ombudsman.
386.Subsection (4) also provides that the order may limit the duty so that it applies only to prescribed relevant complaints. A relevant complaint is defined in subsection (6) as a complaint against an estate agent made by a seller or potential buyer and relating to an act or omission in the course of the agent's activities in relation to the home information pack. This includes the giving of advice as to whether a pack is required.
387.Subsection (5) allows membership of an approved redress scheme to be open to persons who are not subject to a duty to belong to an approved redress scheme. This could include estate agents who deal in commercial properties that are not subject to the home information pack duties. It also allows an approved redress scheme to provide, on a voluntary basis, for investigation and determination of complaints about agents' activities other than those relating to home information packs. It also provides that the scheme may specify cases or circumstances in which a complaint will not be investigated or determined. For instance, a scheme could exclude investigation of complaints about an act or omission taking place a significant time before the complaint was made.
388.Subsection (7) provides that, for the purposes of law relating to defamation, the investigation and determination of a complaint is to be treated in the same way as court proceedings. The effect of this is to allow the ombudsman to conduct investigations and determinations freely without the threat of defamation proceedings. Similar provision exists for most other statutory ombudsmen.