Consumers, Estate Agents and Redress Bill [HL]

House of Commons

Session 2006 - 07
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Consumers, Estate Agents and Redress Bill [HL]

Consumers, Estate Agents and Redress Bill [HL]
Schedule 6 — Estate Agents’ Redress Schemes
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may direct with respect to the levels of compliance with the
standards which the licence holder has achieved.”
3     (1)
The Postal Services Act 2000 (c. 26) is amended as follows.
      (2)
In section 22 (final orders), in the definition of “relevant requirement” in
subsection (5) (as substituted by paragraph 3(2) of Schedule 2 and amended
5
by section 52), after “or” at the end of paragraph (a) insert—
“(aa)
an obligation imposed under section 61A, or”.
      (3)
After section 61 insert—
“Information
61A
Information relating to complaints handling standards
10
(1)
This section applies in relation to standards prescribed by the
Commission by regulations under section 43 of the Consumers,
Estate Agents and Redress Act 2007 (standards for complaints
handling) in relation to licence holders under Part 2 (or some of
them).
15
(2)
The Commission must from time to time collect information with
respect to the levels of compliance with the standards which those
licence holders have achieved.
(3)
At such times as the Commission may direct, each of those licence
holders must give the Commission such information as the
20
Commission may direct with respect to the levels of compliance with
the standards which the licence holder has achieved.”
Schedule 6
Section 53

Estate Agents’ Redress Schemes
1
The Estate Agents Act 1979 (c. 38) is amended as follows.
25
2
After section 23 insert—
“Redress schemes
23A
Redress schemes
(1)
The Secretary of State may by order require persons who engage in
estate agency work in relation to residential property (“relevant
30
estate agency work”) to be members of an approved redress scheme
for dealing with complaints in connection with that work.
(2)
An order may provide for the duty to apply—
(a)
only to specified descriptions of persons who engage in estate
agency work; and
35
(b)
in relation to any relevant estate agency work carried out by
a person to whom the duty applies or only in relation to
specified descriptions of work (which may be framed by
reference to descriptions of residential property).

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(3)
An order may also provide for the duty not to apply in relation to
complaints of any specified description (which may be framed by
reference to a description of person making a complaint).
(4)
In subsections (1) and (2)(a), the reference to persons who engage in
estate agency work does not include a reference to persons who
5
engage in that work in the course of their employment.
(5)
The power to make an order shall be exercisable by statutory
instrument which shall be subject to annulment in pursuance of a
resolution of either House of Parliament.
(6)
Before making an order the Secretary of State must be satisfied that
10
all persons who are to be subject to the duty will be eligible to join a
suitable approved redress scheme before the duty applies to them.

For this purpose the Secretary of State may disregard persons who
cannot lawfully engage in the relevant estate agency work to which
the duty applies.
15
(7)
Nothing in this section prevents an approved redress scheme from
providing—
(a)
for membership to be open to persons who are not subject to
the duty;
(b)
for the investigation and determination of any complaints in
20
relation to which the duty does not apply, where the
members concerned have voluntarily accepted the
jurisdiction of the scheme over those complaints;
(c)
for the exclusion from investigation and determination under
the scheme of any complaint in such cases or circumstances
25
as may be specified in or determined under the scheme.
(8)
For the purposes of this section—
(a)
a “redress scheme” is a scheme which provides for
complaints against members of the scheme to be investigated
and determined by an independent person (“the
30
ombudsman”);
(b)
a redress scheme is “approved” if—
(i)
it is for the time being approved by the OFT under
Schedule 3; or
(ii)
it is administered by or on behalf of the Secretary of
35
State and designated by him as an approved redress
scheme for the purposes of this section;
(c)
a “complaint” is a complaint made by a person by virtue of
his being or having been a seller or buyer of residential
property;
40
(d)
“seller”, in relation to residential property, means a person
who claims that he is or may become interested in disposing
of an interest in land in respect of that property (and includes
a person who disposes of such an interest);
(e)
“buyer”, in relation to residential property, means a person
45
who claims that he is or may become interested in acquiring
an interest in land in respect of that property (and includes a
person who acquires such an interest).

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(9)
The Secretary of State may not designate a scheme as an approved
redress scheme for the purposes of this section unless the Secretary
of State is satisfied that the scheme is one which could be approved
by the OFT in accordance with paragraphs 2 to 5 of Schedule 3.
(10)
Schedule 3 (which makes further provision in connection with the
5
approval of redress schemes etc.) shall have effect.
(11)
In this section—
“order” means an order under subsection (1);
“the duty” means the requirement under an order to be a
member of an approved redress scheme.
10
23B
Enforcement
(1)
If a duly authorised officer of an enforcement authority other than
the OFT believes that a person has engaged (or is engaging) in estate
agency work in relation to residential property in breach of the duty
imposed by an order under section 23A(1) he may give a penalty
15
charge notice to that person.
(2)
A penalty charge notice may not be given after the end of the period
of six months beginning with the day (or in the case of a continuing
breach the last day) on which the breach of duty was committed.
(3)
Schedule 4 (which makes further provision in connection with
20
penalty charge notices) shall have effect.
(4)
An enforcement authority other than the OFT must notify the OFT if
it believes that a person has engaged (or is engaging) in estate agency
work in relation to residential property in breach of the duty
imposed by an order under section 23A(1).
25
23C
Meaning of residential property
(1)
For the purposes of sections 23A and 23B “residential property”—
(a)
has the meaning given by subsection (2); but
(b)
does not include land of a description specified in an order
made by the Secretary of State for the purposes of this section.
30
(2)
“Residential property” means any land that consists of or includes a
building or part of a building—
(a)
the whole or part of which is used as a dwelling or as more
than one dwelling; or
(b)
that is (or is to be) offered for sale on the basis that the whole
35
or part of it is suitable for such use or is intended to be so
suitable by the time the seller disposes of his interest in it.
(3)
In subsection (2), the reference to a building or part of a building (so
far as relating to paragraph (b) of that subsection) includes a
reference to a building or part that is being or is to be constructed.
40
(4)
A description of land specified by order under subsection (1)(b) may
be framed by reference to the purpose or purposes for which the land
(or part of it) is or is intended to be used.
(5)
The power to make an order under subsection (1)(b) shall be
exercisable by statutory instrument which shall be subject to
45

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annulment in pursuance of a resolution of either House of
Parliament.”
3
After Schedule 2 insert—
“Schedule 3
Section 23A(10)

Redress Schemes
5
Approval of redress schemes
1
A redress scheme may be approved for the purposes of section
23A by the OFT acting in accordance with paragraphs 2 to 8.
2     (1)
A scheme may not be approved unless the OFT considers that—
(a)
the provisions of the scheme; and
10
(b)
the manner in which it will be operated (so far as can be
judged from facts known to the authority);

are satisfactory for the purposes of section 23A.
      (2)
Without prejudice to the generality of sub-paragraph (1), a scheme
must not be approved unless the OFT considers that it makes
15
satisfactory provision about—
(a)
the complaints which may be made under the scheme
(which may include complaints about non-compliance
with the provisions of a code of practice or other
document);
20
(b)
the ombudsman’s duties and powers in relation to the
investigation and determination of complaints (which may
include power to decide not to investigate or determine a
particular complaint);
(c)
the redress which the ombudsman may require members
25
to provide to complainants, which must include the types
of redress specified in sub-paragraph (3);
(d)
the enforcement of any requirement to provide redress
imposed on a member in accordance with the scheme.
      (3)
The types of redress mentioned in sub-paragraph (2)(c) are—
30
(a)
providing an apology or explanation;
(b)
paying compensation; and
(c)
taking such other actions in the interests of the
complainant as the ombudsman may specify.
3     (1)
In determining whether a scheme, or any provisions mentioned in
35
paragraph 2(2), are satisfactory the OFT must have regard to—
(a)
the interests of members of the scheme and of sellers and
buyers of residential properties; and
(b)
such principles as—
(i)
in the opinion of the OFT constitute generally
40
accepted principles of best practice in relation to
consumer redress schemes, and
(ii)
it is reasonable to regard as applicable to the
scheme.

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      (2)
In considering the interests mentioned in sub-paragraph (1)(a), the
OFT may have regard to the number of other redress schemes
which are (or are likely to become) approved redress schemes.
4
The OFT must not approve a scheme unless it considers that the
scheme makes satisfactory provision about the provision of
5
information by the ombudsman or the scheme administrator to—
(a)
persons exercising functions under other approved
schemes;
(b)
persons exercising functions under other consumer
redress schemes; and
10
(c)
the OFT or any other person exercising regulatory
functions in relation to the activities of persons engaging in
estate agency work.
5
The OFT must not approve a scheme if it considers that the scheme
provides for membership to be revoked on any unfair grounds.
15
Applications for approval to the OFT
6
An application for approval by the OFT of a redress scheme
must—
(a)
be made in such manner as the OFT may determine; and
(b)
be accompanied by such information as the OFT may
20
require.
7
Where the OFT is proposing to refuse an application for approval
it must give the applicant a notice stating—
(a)
that it is proposing to refuse the application;
(b)
the grounds for the proposed refusal; and
25
(c)
that representations about the proposed refusal may be
made within such period of not less than 30 days as is
specified in the notice.
8
If the OFT decides to refuse an application for approval, it must
give the applicant a notice stating—
30
(a)
the OFT’s decision to refuse the application; and
(b)
the reasons for the decision.
Notification of changes to an approved scheme
9
The scheme administrator of a redress scheme which is approved
by the OFT must notify the OFT of any change to the scheme
35
before the end of the period of 14 days beginning with the day on
which the change is made.
Withdrawal of approval by the OFT
10
The OFT may withdraw approval of a redress scheme which is for
the time being approved by it.
40
11
Before withdrawing approval of a scheme, the OFT must give the
scheme administrator a notice stating—
(a)
that it proposes to withdraw its approval;
(b)
the grounds for the proposed withdrawal of approval; and

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(c)
that representations about the proposed withdrawal may
be made within such period of not less than 30 days as is
specified in the notice.
12
The OFT must give the scheme administrator a notice stating—
(a)
its decision on a proposal to withdraw approval; and
5
(b)
the reasons for its decision.
13
If the OFT decides to withdraw approval of a scheme—
(a)
the withdrawal has effect from such date as may be
specified in the notice under paragraph 12;
(b)
the scheme administrator must give a copy of the notice
10
under paragraph 12 to every member of the scheme.
Revocation of designation by the Secretary of State
14
If the Secretary of State decides to revoke his designation of a
scheme for the purposes of section 23A, he must give every
member of the scheme a notice stating—
15
(a)
that he has decided to revoke the designation;
(b)
the reasons for his decision; and
(c)
the date from which the revocation has effect.
Defamation proceedings
15
For the purposes of the law relating to defamation, proceedings
20
under an approved redress scheme in relation to the investigation
and determination of a complaint are to be treated in the same way
as proceedings before a court.
Interpretation
16
In this Schedule—
25
“redress scheme” has the meaning given in section 23A(8)(a);
“approved redress scheme” has the meaning given in section
23A(8)(b);
“buyer”, in relation to residential property, has the meaning
given in section 23A(8)(e);
30
“complaint” has the meaning given in section 23A(8)(c);
“ombudsman” means the independent person mentioned in
section 23A(8)(a);
“residential property” has the meaning given in section 23C;
“scheme administrator”, in relation to a redress scheme,
35
means the person who administers the scheme;
“seller”, in relation to residential property, has the meaning
given by section 23A(8)(d).”

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4
After Schedule 3 (as inserted by paragraph 3) insert—
“Schedule 4
Section 23B(3)

Penalty notices under section 23B(1)
1
A penalty charge notice given to a person under section 23B(1) by
a duly authorised officer of an enforcement authority other than
5
the OFT must—
(a)
state the officer’s belief that that person has committed a
breach of the duty imposed by an order under section
23A(1);
(b)
give such other particulars of the circumstances as may be
10
necessary to give reasonable notice of the breach of duty;
(c)
require that person, within a period specified in the
notice—
(i)
to pay a penalty charge specified in the notice; or
(ii)
to give notice to the enforcement authority that he
15
wishes to review the notice;
(d)
state the effect of paragraph 8;
(e)
specify the person to whom and the address at which the
penalty charge may be paid and the method or methods by
which payment may be made; and
20
(f)
specify the person to whom and the address at which a
notice requesting a review may be sent (and to which any
representations relating to the review may be addressed).
2
The penalty charge specified in the notice shall be of such amount
(not exceeding £1,000) as may be prescribed for the time being by
25
regulations made by the Secretary of State.
3     (1)
The period specified under paragraph 1(c) must not be less than 28
days beginning with the day after that on which the penalty
charge notice was given.
      (2)
The enforcement authority may extend the period for complying
30
with the requirement mentioned in paragraph 1(c) in any
particular case if they consider it appropriate to do so.
4
The enforcement authority may, if they consider that the penalty
charge notice ought not to have been given, give the recipient a
notice withdrawing the penalty charge notice.
35
5     (1)
If, within the period specified under paragraph 1(c) (or that period
as extended under paragraph 3(2)), the recipient of the penalty
charge notice gives notice to the enforcement authority requesting
a review, the authority shall—
(a)
consider any representations made by the recipient and all
40
other circumstances of the case;
(b)
decide whether to confirm or withdraw the notice; and
(c)
give notice of their decision to the recipient.
      (2)
A notice under sub-paragraph (1)(c) confirming the penalty
charge notice must also state the effect of paragraphs 6(1) to (3)
45
and 8(1) and (3).