Estate agent regulation one step closer

Friday 14 April 2023

Estate agents operating in Jersey may soon have to become members of a government-approved redress scheme, as the island moves a step closer to regulation of the property industry.

In late-March, Deputy Max Andrews lodged a two-part proposition to establish regulatory schemes for estate agents, after the Environment Minister revealed he had "no plans" to do so.

At the time, Deputy Andrews said that he had identified "a need to ensure that estate agents are members of a statutory regulatory body and redress scheme".

He explained: "As it stands, estate agents can access the market with ease without undertaking professional qualifications when dealing with transactions that are the biggest investments some people will make in their lifetime."

He has now described Deputy Renouf's decision not to move forward with regulation an "unpopular move."

Pictured: Deputy Max Andrews said that while only one of his propositions will be up for debate, it is a "satisfactory outcome".

Now, the first part of the proposal — which says that the Economic Development Minister should establish a "statutory regulatory body for estate agents" — has been smacked down by the Council of Ministers.

But the second part — which says that estate agents should register with an "independent redress scheme" — looks set to pass, albeit with a slight amendment: that the scheme is "approved by the Government of Jersey".

As it now stands, the proposition requests that by December 2024, there will be a requirement for estate agents to obtain membership of a government-approved independent redress scheme. This would make it an offence for a business conducting estate agency activities not to be a member and participate in an approved redress scheme under the Consumer Protection Law, the penalty for which carries a level three fine (£10,000).

Deputy Andrews said that the proposition would bring Jersey in line with the UK, where it has been a mandatory requirement for estate agents to join an approved consumer redress scheme since 1 October 2008. One of the UK schemes, the Property Ombudsman, makes approximately 5,700 decisions a year, achieving 99% compliance.

Pictured: "As it stands, estate agents [in Jersey] can access the market with ease without undertaking professional qualifications when dealing with transactions that are the biggest investments some people will make in their lifetime."

Deputy Andrews explained: "I do think that this is a satisfactory outcome, because what we will be seeing is that people using estate agent services will be protected by enhanced legislation. The consumer protection law is very generalized, and we need to go this one step further by introducing more robust legislation."

He added that the previous decision not to progress the regulation was "a very unpopular move from Deputy Renouf".

"You could tell by talking to people that it was not welcomed," said Deputy Andrews. "We do need to see something in place, because many people have experiences they want to share about ordeals they have with estate agents."

Members of the public shared their experiences with Express and the JEP, with some raising concerns about how this would bear on the upcoming Moneyval assessment. A bad report from this European organisation could have dire consequences for Jersey, with the island particularly keen to avoid being added to a 'grey list' of jurisdictions which are judged to have inadequate laws, practices and resources to tackle financial crime.

Deputy Andrews said: "As a legislature, we do have things in place, but we could ideally be better positioned. This is what the public want. I have been putting a lot of pressure on the Council of Ministers, and now they have conceded some ground."

He expects the Council of Ministers will support the remaining proposition when it is debated in the States.

Pictured: The amendment — which makes it look as though the proposition will pass — is a U-turn from Deputy Renouf's previous position that there was no need to introduce regulation.

Estate agents in Jersey are currently not required to hold any professional qualifications, belong to a professional body, or abide by a code of conduct.

Previously, Deputy Renouf said the existing Consumer Protection Law "already provides a comprehensive framework to deal with unfair commercial practices" and "supports estate agents in the island to adopt good practice".

He deemed that "it would be proportionate to introduce new regulation specifically for estate agents."

That came even after a review carried out in 2021 found that only 40% of Jersey estate agents had voluntarily become members of a redress scheme dealing with disputes between clients and agencies - a figure low in comparison with other jurisdictions. A survey of 65 estate agents also discovered that 86% believed regulation was "necessary".

The island's estate agents have recently renewed calls for regulation, and former Environment Minister Deputy Steve Luce also said that the absence of progress from the new government was "disappointing after the Scrutiny Panel worked so hard to produce such compelling recommendations."