Legal Articles

Consumer Protection Act and Estate Agents Code of Conduct

Estate agents’ responsibilities are made clear in the Institute of Estate Agents South Africa Code of Ethics and Conduct and is supported by the Consumer Protection Act.

Why is There a Code of Conduct for Estate Agents?

Because of the nature of the business, estate agents are constantly working with people and any person who is a prospective home buyer is entitled to the protection offered by the CPA.

Therefore, the CPA compels the estate agent as well as the seller of the property to avoid promoting a home or property for sale under any false pretences whatsoever.

Misleading representations which in effect mask existing defects of the property on sale can result in serious financial or legal repercussions.

In such a case, the buyer of the home is completely protected by the CPA and its rights and warranties.

Duties and Obligation Imposed on Estate Agents by the Act

The CPA clearly indicates the seller of a property as well as the estate agent must avoid using any enticing, misleading or catchy phrases to promote the property for sale.

Additionally, wording that is deceptive and does not fully disclose the current condition of the property is not allowed.

Furthermore, they may not be intentionally vague or deliberately omit any information regarding the current defects of the home.

Should the seller be apprehensive in disclosing any information to the buyer of the home, the estate agent has a legal and ethical obligation to share this information to the buyer.

Estate Agents Responsibilities

Because estate agents have certain responsibilities, there have been many cases where the court has ruled agents and sellers to compensate for unlawful or misleading advertising which resulted in the sale of a property.

Should there be any deception in the methods used to sell a property and the estate agent is found to be complicit in the deception, both the seller and the agent can be held liable for part of or all losses incurred by the buyer of the property.

By selling property to a buyer, the estate agent is carrying out a service to the consumer as part of the usual course of business and is therefore governed by the CPA and all relevant clauses.

Estate Agent Code of Conduct

Estate agents are permitted to use various forms of direct marketing such as email, SMS, social media platforms, newspapers and flyers delivered to post boxes.

The CPA allows a buyer to cancel any transaction which results from direct marketing within 5 days of the transaction.

Transparency and full disclosure of any existing defects on the property is the best way in which an estate agent can conduct their business so as to avoid any legal action.

Van Deventer & Van Deventer Incorporated – Property Attorneys South Africa

When buying a new home, it’s advisable to have an independent inspector carry out a full inspection on the property.

The inspection should include plumbing, electrical wiring and all physical structures for any latent defects and the inspector can issue an inspection report.

The buyer of the property may insist that the report forms part of the purchase agreement.

For more information regarding property law or estate agent responsibilities, please feel free to contact us.