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Mr. Raynsford: The hon. Gentleman is absolutely right that the property would still be on the market, because the advertisement seeking to attract potential buyers would still be in place. Two points should be made. First, there will be no problem if the marketing is being conducted properly with a seller's pack, because the seller's pack would continue to be available to cover that period. Secondly, we are obviously interested in getting expeditious responses to instructions to cease marketing, and we want estate agents to act as quickly as possible in order to avoid confusing the public. It is far more sensible to link the two, rather than to say that no obligation exists once the seller has sent instructions cancelling the sale. In the latter case, there would be no incentive for the estate agent to remove the sign because there would be no liability. Although I accept that it will happen, it is a good thing to have an incentive for the agent to remove the sign expeditiously after instructions have been withdrawn. Amendment No. 50 would restrict the seller's pack obligations. Mr. Loughton: I am confused by that answer. What is the incentive for the agent to take down his board? Surely the incentive is for him to continue to market the property for as long as possible in the hope of getting a higher offer, on which he would gain higher commission. I do not understand why those two requirements—receiving written instructions from the vendor and stopping marketing—should act as an incentive for the agent to fulfil his side of those two criteria. Mr. Raynsford: The incentive is that the agent would still have the obligation to maintain and have available a seller's pack, because the board would still be on site advertising that the property was for sale and individuals could respond to it. Clearly, one wants a framework under which estate agents would respond expeditiously to an instruction that the property be taken off the market by taking the property off the books and removing signs advertising that the property is for sale. Mr. Loughton: First, how does one guarantee that? Secondly, is the Minister saying that it is a real deterrent to an estate agent to have to continue to maintain a seller's pack—that is, to have a quantity of them in his office? Surely, the estate agent would like to get rid of as many of those seller's packs as possible on the basis that they cost money to produce and because he would be remunerated for the cost by those who ask to see them. That is no disincentive whatever. Mr. Raynsford: We are getting into extremely esoteric territory. Regardless of whether that would be a disincentive to the estate agent, it cannot be part of an efficient operation for such an agent to seek to shift packs by keeping a notice board up when a property has been withdrawn from the market. We have set out a clear framework in clause 2(4). It states:
The first of the conditions is that the contract is terminated, and the second is that the agent has ceased to take action that makes public the fact that the property is on the market. That is a common-sense response to real-world situations. Amendment No. 50 would have the effect of restricting the seller's pack obligations to sellers who market their homes to the public at large. To exclude marketing to a section of the public from those obligations would open the door to abuse. Sellers wishing to avoid the seller's pack obligations could do so by ensuring that their marketing activities were restricted in some way. They could market to a wide range of people, but providing that their marketing was restricted to a section of the public rather than the public at large, they could claim that they were not marketing their property. That would be a major loophole in the Bill. It is not our intention to catch private transactions where, for example, a home is offered to a family member, a friend or to another individual. That is the reason for the wording of (1)(6), which states:
That phrase has precedents. The hon. Member for Eastbourne has done his homework, and has identified the precedent contained in the Race Relations Act 1968. However, there are others. The phrase is used in the Food Standards Act 1999, the Data Protection Act 1998, the Confiscation of Alcohol (Young Persons) Act 1997, the Disability Discrimination Act 1995 and elsewhere. The purpose of the phrase is to separate a transaction that involves the public or a section of the public from a purely private transaction. Mr. Waterson: I assume that the Minister will say that that is all to be subject to draft regulations. However, he set out three categories: family member, friend and individual. I can already discern a host of definitional problems with those categories. Leaving them aside, what about the man in the pub who is not a friend or a family member? Let us imagine a group of individuals in a pub, one of whom responds to the chance remark, ``I may be making my property available for sale,'' by saying, ``Come outside, I'd like to have a word with you''—not for the purposes of resolving any animosity between the parties, but because he wants to make a quick cash offer, without having to pay for seller's packs or estate agent's commission. What about that? Mr. Raynsford: I will not pursue that example, which seems unlikely to prove a satisfactory basis for a sale. There is a clear distinction to be made. If the individual in that example stands on a stool in a pub and shouts, ``My house at No. 74 Acacia Avenue is, or may be, available for sale,'' there is no question that that constitutes marketing the property, because the individual is advertising that a specific property is for sale to a section of the public. If, however, the individual meets another individual in a purely personal contact— Mr. Waterson: Not in a pub. Mr. Raynsford: It could be in a pub, it could be anywhere. It could even be in the Conservative club, if people still go there. Any such contact, providing that it involves only one other individual, and providing also that the property is not made more widely available, is, effectively, a private transaction. The same would apply to the swaps example given by the hon. Member for Cotswold, in which a swap was arranged between two parties who negotiated freely with each other and had no involvement with other parties. The crucial distinction is between a private transaction—one between family, friends or two individuals in which there is no other party involved—and a marketing operation that seeks to make information available to the public or a section of the public. Mr. Waterson: I do not want to pursue the example too far, because that way madness lies for the Minister and me. Let us assume that the owner of 74 Acacia Avenue goes to the pub and, instead of standing on a stool to announce to a section of the public that his house may be available for sale, he is astute enough to have read the report of our proceedings and sidles up to a succession of individuals at the bar during the course of an evening. He engages them in idle conversation about the property market, but slips in the fact that 74 Acacia avenue, his home, might be available for sale in the foreseeable future and—bingo!—one of them says, ``Well, funnily enough, I've always wanted to live at 74 Acacia Avenue,'' and so a transaction ensues. I say that not because it is absurd—I am not sure that it is that absurd—but as an example of how difficult the Minister will find it to provide a definition. Mr. Raynsford: The hon. Gentleman is performing a perfectly proper activity, especially for the Opposition, which is to explore every possible circumstance to test the Bill. In the event of an individual doing what he described—approaching several different people—the individual is clearly seeking to market the property. One of them might happen to be a trading standards officer or to know the local authority trading standards officer, which would clearly lead to a reminder that the individual should have a seller's pack, as he is putting the property on the market. The hon. Gentleman will know, as we all do, that although distinctions of such a nature are extremely important, there will always be fuzzy edges. It is impossible to have a precise borderline between one set of circumstances and another. The purpose of the law is that it should take account of normal circumstances, be practicable and comply with what people sense is the right distinction. Mr. Brake rose—
Mr. Raynsford: I will give way to the hon. Gentleman in a moment; I have noted his waving hand. The law should ensure that people can act in a way that they recognise as sensible. A distinction is to be drawn between a private transaction and the marketing of a property. There will always be questions around the borderline, but the distinction between the two is sensible, and most people will recognise it as a proper base. Mr. Brake: I simply want to clarify whether the following is one of the fuzzy areas to which the Minister referred. Would it constitute a private sale or a public transaction if a parent offered a property to one or other of his or her two children? Mr. Raynsford: I said earlier that the seller's pack would not be required when a home was offered to a family member, a friend or an individual. In that case, the family definition would apply, and because it was entirely within the family it would not be a public transaction. Mr. Loughton: The more that we debate the subject, the more that reasonable instances arise, and I want the Minister to consider another. It is quite common for parents to put a property in trust for, say, their son and daughter. The trustees of that trust fund would typically be a financial adviser, a solicitor, an accountant or whatever. The trustees, who are technically the owners of the property, are not family members connected with the son and daughter who are the beneficiaries of the trust, and are not friends either, in the normal sense of the word. Would that constitute a private sale exempt from normal considerations?
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| ©Parliamentary copyright 2001 | Prepared 16 January 2001 |
