Keeping clients informed

Keeping clients informed

What information you must give to clients about services provided to buyers, referral fees, personal interest in a transaction, and offers.

Information to clients about services provided to buyers

You must inform your client in writing of: 

  • the services you offer or intend to offer to a prospective buyer, for example: 
    • arranging mortgages, insurance or the sale of the buyer’s property
    • offering a removals service
  • the services which you know a connected person or third party is offering or intends to offer to a prospective buyer (if you or a connected person will benefit financially from providing the service), for example, if you get commission for recommending someone to the buyer

You don’t have to say how much you’ll be paid for these services.  

Be transparent with referral fees

A referral arrangement exists where: 

  • an agent recommends (refers) another business to a seller or prospective buyer, and 
  • the business rewards the agent for the referral with money, gifts or any other benefit

The business might offer services, for example photography or conveyancing.  

You must make the referral agreement clear to the buyer or seller. They don’t have to use the business you recommended.

If you don’t disclose referral arrangements, you may be liable for: 

  • criminal prosecution under the Consumer Protection from Unfair Trading Regulations 2008 (CPRs)
  • action by NTSELAT under the Estate Agents Act 1979

Only a court can decide whether a particular set of circumstances amounts to a breach of the CPRs.  

We recommend you disclose in clear terms:

  • the price of the services you give to your client, including any compulsory extras (as explained in the Fees, charges and terms of business page)
  • any referral arrangement, and with who it’s with
  • the amount of any transaction-specific referral fee
  • where a referral retainer exists, for example if an estate agent routinely refers potential purchasers to a conveyancing solicitor, an estimate of the annual value of that retainer to the estate agent or its value per transaction
  • where the referral is rewarded other than by payment, an assessment of the annual value of the reward or the value of the reward per transaction

For more information, read our guidance on transparency of fees involving property sales.

Avoid bias

You must not discriminate against potential buyers because they don’t want, or might refuse, to take services from:

  • you 
  • a connected person
  • someone from whom you or a connected person may get financial benefits

For example, you must not:

  • refuse to give information about a property to these buyers
  • take longer to forward property details to these buyers 
  • make additional requirements of these buyers as a condition of passing on an offer, for example, make them have a mortgage survey before you pass on their offers

Declare personal interest in a property transaction

You must declare any personal interest, as defined in section 21 of the Estate Agents Act, you or a connected person have in a transaction. Do this as soon as you can, in writing. 

A connected person can be:

  • your employer or principal
  • your employee or agent
  • any associate of yours, or of any of the persons mentioned above, including any business associate

If you’re not sure whether a person or body with whom you have some link is a connected person, get legal advice.

If you have an existing personal interest, you must declare this in writing before you begin negotiations.

You must also tell the client in writing as soon as possible if you or a connected person are:

  • seeking to get an interest, as defined in section 2 and 21 of the estate Agents Act 1979, in your client’s property
  • selling your property to the client

In these circumstances, it’s best industry practice that you or the connected person do not take part in the sale of the property.

You must not ask or get a deposit for the sale of a property in which you have a personal interest.

Give information to clients about offers

You must give your client written details of all offers from potential buyers, except the offers which the client has told you in writing don’t need to be passed on.

These can be:

  • offers below a certain price 
  • offers where agents are under a statutory duty to delay passing them on, for example, where a suspicious activity report is made

It might help to keep a written record of all offers you get. 

You must pass on this information promptly, by hand, post, email or fax.

Read our guidance document on the definition of terms (pdf, 186KB) (opens new window) for more information on offers from prospective buyers.

Misleading buyers or sellers about offers

You must not mislead buyers or sellers in any way in relation to offers. You must avoid presenting factually true statements in a misleading way. 

Read our guidance on property sales and lettings for more advice on how to avoid misleading buyers and sellers.