Estate Agent Regulation: Be careful what you wish for

It is often said that truth is stranger than fiction. So, I was not entirely surprised to hear recently that Labour, who based on current projections are highly likely to form the next government, are planning on requiring all estate agents to hold a minimum level of academic qualifications. At least one A level, or an undergraduate degree for directors, if you’re curious.

My immediate response was as follows: but there’s no such requirement for lawyers?

Indeed, there is no minimum requirement to be a conveyancer whatsoever, nor to call oneself a lawyer. Contrasted with certain protected titles such as “solicitor” or “licensed conveyancer” which are increasingly a rarity amongst conveyancers anyway.

Additionally, it appears virtually certain that agents will be subject to regulation at some point, much like lawyers. I do not know whether estate agents are broadly in favour of these proposals, but anecdotally I see that conveyancers overwhelmingly are. Or at least, I have not observed any other conveyancers expressing concerns publicly. My question is, why?

I imagine I am not revealing any trade secrets by stating that many conveyancers harbour at least a pinch of resentment towards estate agents, justified or not, for various reasons. And I suspect that conveyancers will see further regulation being imposed upon agents as a way of ‘bringing them in line’. I think this is misguided.

Consider why the conveyancing process is so disjointed and expensive. In my view, it is partially owing to too many people duplicating the same processes independently. By the time the conveyancing process gets off the ground, a purchaser will have undergone some form of ID and source of funds checks from the mortgage lender/broker and the estate agent.  A mess in my view, and one which must be incredibly frustrating and time consuming for clients.

We have lost sight of what each party in a conveyancing transaction is meant to be doing: estate agents, and I say this without intending any offence despite the negative connotations, are salespeople. Their primary role is to sell properties. However, estate agents are now suffering from similar levels of mission creep as lawyers. Perhaps worse. Why should estate agents be required to do AML checks on a buyer? Save for auctions they do not hold any client money.

As lawyers we therefore find ourselves faced with the following potential reality: The estate agent is both better formally educated than us (collectively), and equally well regulated. Further, the estate agent, under the guise of providing Material Information, has already conducted due diligence on the property, as required by National Trading Standards.

So lawyers, have I managed to worry you yet? You may well baulk at the suggestion that an estate agent could undermine the role of the conveyancer, and perhaps you would be right to do so. Conveyancing is now more than ever an incredibly complex job that takes years if not decades to master. But it appears, conveyancers are the only ones that know it.

Bizarrely, the Digital Property Market Steering Group (DPMSG) that is closely aligned with the reprehensible Home Buying and Selling Group (HBSG) had at its launch event the “director of cadastre and land registration” at the Norwegian Mapping Authority (HMLR equivalent) to boast the superiority of the Norwegian system. A system in which, owing to a legal system entirely distinct from our own, estate agents conduct both estate agency and conveyancing, and buyers are often unrepresented. I don’t think it strains credulity to believe that these increasingly powerful and barely opposed groups, favour a greater role for estate agents and consequently a reduced role for conveyancers. The regulation of estate agents I suggest, is, together with Up Front Information, another essential step towards realisation of that aim.

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