Ombudsman hearings mandatory under Human Rights Act

Agents will be able to demand a hearing with the Ombudsman of their redress scheme if they want to appeal a decision from next month.

The requirement is part of provisions under the Human Rights Act, which come into force on October 1.

They coincide with the Consumers, Estate Agents and Redress Act 2007 requirement for agents to be registered with one of the two Office of Fair Trading-approved redress schemes - the Ombudsman for Estate Agents or the Surveyors Ombudsman Scheme - also by October 1.

OEA Christopher Hamer (pictured) says: "Given that I have no power to take evidence under oath or cross-examine witnesses, these hearings are going to be informal in nature.

"Both sides of the dispute will be there; they can choose to be represented professionally, legally or otherwise. I will control the hearing to allow both parties to make verbal representations and for me to follow up on any points that I need to, though I can decline a hearing providing I give my reasons for doing so in writing."

But Hamer has concerns about a potential imbalance in the hearing process.

"If I have a large firm of estate agents which, quite legitimately, chooses to bring along its legal representation and I have Mrs Smith from Cornwall on the other side, I'm concerned that I'll have to be protecting her interests against the other side and that's not what my role is.

"My role is to remain independent, but I think it [the imbalance] would naturally occur in my attempt to ensure that Mrs Smith was adequately represented, so it's a concern for me about how the hearing will actually work in practice."

Also under the Human Rights Act, in the event of a dispute each Ombudsman is required to provide an agent's submission to their complainant, which they will do at the stage of issuing their proposed decision.

Meanwhile, the OEA is reviewing the effectiveness of its Sales Code of Practice, which was introduced in 2006. Hamer says that the requirement for agents to document commission fees as a sterling amount as well as a percentage is one aspect of the review.

"Take commission of 1.5% of the asking price - it's actually 1.5% of what you sell a property for. I think agents and sellers see that as being a little bit confusing.

"I think we would review whether it is necessary to put the sterling amount in."

Hamer says the Code also needs to take into account the issue of dual fee liability following the Foxtons case in which the Court of Appeal ruled against Foxtons being awarded a £20,000 fee for introducing a buyer to a seller but failing to close the deal.

"The existing Code will continue in its current format, so the principles which my member agents follow will still be in place. I just think that it is right to review it [the Code] in light of good practice and feedback from agents," says Hamer.

He adds that he will consider extending his redress scheme to surveyors, as well as international and commercial sectors, in due course.

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