The real estate market is a vital component of the economy and holds significant wealth. To ensure that buyers and sellers are treated fairly and receive accurate information, the sector is regulated.
This article will provide an overview of the Estate Agency Act 1979, including what it defines as estate agency work, its key principles, how it regulates conflicts of interest, who enforces it, and the compliance requirements related to data retention and money laundering regulations.
What is the Estate Agents Act 1979?
The Estate Agents Act (EAA) 1979 serves this purpose by regulating the estate agent sector in the UK. It lays out the duties and responsibilities of estate agents, including standards for competence, the information that must be provided to clients, and handling clients' money.
The Estate Agents Act 1979 defines estate agency work as:
[…] introducing and/or negotiating with people who want to buy or sell freehold or leasehold property (including commercial or agricultural property) where this is done in the course of a business pursuant to instructions from a client.
What are the Estate Agent Act 1979 key principles?
The EAA 1979 regulates the estate agent sector. It sets out duties and responsibilities regarding:
- The information an estate agent must provide to clients before agreeing to act, including details regarding the payment the estate agent will receive
- The keeping of clients’ money and interest and insurance cover relating to those monies
- Standards of competence
The above list is not exhaustive.
Regarding the Estate Agents Act 1979 and conflict of interest, an agent has to disclose any conflict/personal of interest in the land subject to the transaction and to refrain from discriminating against potential buyers who do not want to use their services (for example, refusing to send them information about a particular property).
Who regulates estate agents and enforces the Estate Agents Act 1979?
The regulator for estate agencies across the UK is the National Trading Standards Estate Agency Team (NTSEAT). The responsibility of the NTSEAT is to assess whether a person or business is fit to conduct estate agency work within the terms of the EAA 1979.
Estate Agents Act 1979 and HMRC requirements for data retention
Like all businesses that process personal data, property agents are subject to the UK GDPR and Data Protection Act 2018. They must have a lawful basis for processing personal data and ensure they comply with all Subject Access Requests (SAR).
Do estate agents have to comply with money laundering regulations?
HMRC regulates estate agents. Therefore, it must comply with the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 as amended by The Money Laundering and Terrorist Financing Regulations 2019, which requires all estate agents to have a written anti-money laundering policy in place.
The policy must be communicated to all staff, and employees must be given training on anti-money laundering compliance.
It is recommended that anti-money laundering policies are reviewed annually to ensure they don’t fail to comply with current regulations.
You can find a government document on how to prevent criminals from using your estate agent business for money laundering here.
Get legal assistance from LawBite
Questions about complying with the Estate Agents Act 1979? Our commercial lawyers can provide you with the legal advice you need to ensure that you are fully compliant with the legislation, protecting you from potential legal disputes and expensive litigation.