Hot Topic Highlight - Do you know your CPRs from your BPRs?

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Do you know your CPRs from your BPRs? Confused about what these mean for you when dealing with commercial or residential estate agency work?

Don't fear - Property Elite are here to explain all you need to know about the Consumer Protection from Unfair Trading Regulations 2008 (CPRs) and the Business Protection from Misleading Marketing Regulations 2008 (BPRs).

This will be relevant to some of the mandatory RICS APC competencies, as well as Leasing & Letting and Purchase & Sale, amongst others.

If you are an RICS APC candidate, be sure to check out our great value RICS APC support (e.g. revision quizzes, e-mock interviews and APC question packs). You might also like to check out our free revision quizzes (links on our Blog page), before upgrading to the full versions.

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Why is this relevant?

When dealing with the sale and letting of land and property (both residential and commercial), you must comply with the CPRs and BPRs. 

This means that whether you are a RICS APC candidate, professional member or student - having an understanding of the relevant legislation is essential. 

We will focus on the CPRs in this article, although breaches under the CPRs will generally constitute a breach under the BPRs.

What do I need to know?

• Someone asked me about the Property Misdescriptions Act 1991, what is this?
• What are the CPRs
• Where do the CPRs apply?
• Who do the CPRs apply to?
• What are the penalties for non-compliance?
• What is the general principle of the CPRs?
• What commercial practices are considered to be unfair?
• Who is an average consumer?
• What is a transactional decision?
• What is material information?
• What if I don't have all of the material information?
• How can I comply with the CPRs?
• Where can I find out more?
• How can I seek further support?

Someone mentioned the Property Misdescriptions Act 1991 (PMA), what is this?

The PMA was repealed by the CPRs and BPRs in 2008. Essentially, the new legislation widened the scope of consumer and business protection so agents can no longer rely on the principle of caveat emptor ('buyer beware').

What are the CPRs?

The CPRs are legislation to stop businesses from 'engaging in unfair commercial practices' (RICS, 2014).

Where do the CPRs apply?

To any marketing or property services which reach or are capable of reaching UK consumers. This may include businesses and properties located outside of the UK.

Who do the CPRs apply to?

Almost anyone you deal with as an agent may be considered to be a 'consumer', e.g. existing/potential clients, viewers, buyers, sellers, tenants etc. This goes beyond just your paying clients.

What are the penalties for non-compliance?

• Court order to cease action
• Unlimited fine
• Up to 2 years' imprisonment
• Prohibition order from undertaking agency work

You might also face the following:

• Consumer complaint to an approved address scheme, which may result in an apology and up to ￡25,000 compensation
• Bad publicity
• Damage to your reputation
• Loss of business

What is the general principle of the CPRs?

To treat consumers fairly. Doing this means that you are likely to comply with the CPRs and BPRs.

More specifically, an agent must not engage in unfair commercial practices by 'saying, doing or omitting to say or do something which causes, or is likely to cause, the average consumer to take a different transactional decision' (RICS, 2014). 

What commercial practices are considered to be unfair?

• Giving false/leading information
• Hiding/failing to provide material information (i.e. what you don't say - this differs from the former position under the PMA 1991)
• Acting aggressively/exerting undue pressure
• Not acting with sufficient professional skill/care and in good faith
• Engaging in banned practices

Who is an average consumer?

A consumer who is 'reasonably well informed and reasonably observant and circumspect, taking into account social, cultural and linguistic factors' (RICS, 2014).

This may be modified where:

• A property is targeted at a specific type of consumer (average targeted consumer)
• A property is targeted at vulnerable consumers, e.g. elderly, first time buyers, first time renters (average vulnerable consumer)

What is a transactional decision?

• Paying for services
• Buying a property
• Renting a property
• Accepting an offer
• Viewing a property
• Commissioning a survey
• Paying a pre-contract deposit

What is material information?

This is what is required by the average consumer to make an informed transactional decision, taking into account the relevant context. 

This might include:

• Quoting rent / price
• Location
• Floor areas
• Accommodation
• Tenure
• Proposed lease terms

You may also need to signpost consumers to publicly available information relevant to the wider context, e.g. flood risk, flight paths, listed building status, planning. This could be via website links or telephone numbers on your marketing material.

What if I don't have all of the material information?

If you don't know something, it could still be a misleading omission not to disclose it! 

You need to take reasonable steps to identify the information if it would be required by the average consumer to make an informed transactional decision.

Reasonable steps you make take include:

• Recording information you do know
• Addressing any gaps by speaking to your client or associated third parties, e.g. building surveyor, lawyer, architect
• Verify information if it's accuracy is questionable
• Challenge or investigate further if you are concerned about the information
• Provide material information you identify to consumers before they make a transactional decision
• If you become aware of further information later on, disclose it at the earliest opportunity
• Keep an audit trail of the information you hold and where it was sourced from

How can I comply with the CPRs?

• Have adequate staff training or undertake CPR to increase your knowledge of the CPRs and BPRs
• Check you have systems in place to comply with the CPRs
• Consider how you deal with consumers, i.e. do you treat them fairly?
• Make sure you carry out due diligence checks during an agency transaction
• Ensure you verify material information
• Signpost consumers where necessary to wider information
• Consider who the average consumer may be for a transaction
• Keep good file records
• Review & revise your procedures on a regular basis

Where can I find out more?

We recommend checking out the following:

• Check out the RICS website
• Watch what RICS have to sayabout the CPRs
• Read the RICS guidance
• Read the OFT guidance
• For further specific information, read the CMA lettings guidance
• Listen or read more about advertising law

How can I seek further support?

Sign up for your free CPD certificate here and keep ahead of the latest hot topics by signing up to our newsletter.

If you are an RICS APC candidate, be sure to check out our great value revision quizzes, e-mock interviews and APC question packs. You might also like to check out our free revision quizzes (links on our Blog page), before upgrading to the full versions.

Contact us (07491 252 025 / [email protected]) for a free informal 30 minute chat about more hot topics and how you can boost your CPD hours before December 31. 

If you are a student, drop us a message (07491 252 025 / [email protected]) to see how we can help you land your dream job or work experience.

Stay tuned for our next blog post to help build a better you

N.b. nothing in this article constitutes legal advice!