Many estate agents are in some denial and are clinging to the opinion of some lawyers that the CPA does not apply to private sellers (correct), or to their agents (incorrect) – because the agents are regulated by the Estate Agents Affairs Board - and are therefore exempt from the provisions of the CPA. This opinion appears to arise from a misinterpretation of the scope of the disclosure obligations of intermediaries regulated by other national legislation (Section 27 of the Act).
However, most attorneys believe that estate agents do indeed have obligations and liability under the CPA.
These lawyers point out that estate agents are professional purveyors of a “product” – the product being information on the properties on the agent’s books. With regard to information on properties which agents communicate, both buyers and sellers enjoy protection under the CPA, because they are “consumers” of the product supplier (the agent).
It is clear that estate agents, do bear accountability in terms of the CPA for the material information about a property which they communicate to both buyers and sellers. It will probably take a test court case or two to convince some estate agents on the reach of (and the teeth of) the CPA.
Meanwhile, the question remains: How should professional estate agents be responding to the CPA and to the wave of consumerism generated by the enactment of this new law? In particular, how should agents react to the increasing practice of buyers demanding a home inspection report as a condition of the offer to purchase?
Also how can estate agents protect their business if they perceive a home inspection report to be unnecessarily harsh and a potential deal killer?