Sales agents – do your agreements comply with the law?

Are your terms of business compliant and protecting your commercial position?

There have been many and various changes in legislation over the years that impact on the terms and conditions of business that an estate agent should have in place with their seller client.

With these changes sometimes coming thick and fast, it has become all too easy for agents to find that they have both slipped behind what is legally required and also to fail to protect their own business interests.

In these days of growing legislation on Unfair Contracts and with Consumer Protection at the fore, it is vital that an agent’s terms and conditions are up to date, fair but robust. As always with contracts, they generally only ever get referred to when something goes wrong. That is too late to find out that they are not worth the paper they are written on!

Below are the key terms that should be included by estate agents, as distinct from letting agents. Individual agents may have additional specific clauses that relate to their services.


The Estate Agents Act 1979 and the subsequent Orders and Regulations 1991 made it a requirement to spell out the circumstances that would cause a fee to be paid, the way in which that fee is calculated and the timing of payment.

Fees can be shown as a percentage of purchase price but must also be shown as a pound note figure (based on asking price). VAT must be clear.

Any additional fees (for advertising etc.) must be set out clearly or confirmed separately in writing before being incurred.

Any interest arrangements on outstanding fees must be included.

Agency type

It is also crucial to set out the definitions of sole agency and multi-agency or sole selling rights as prescribed and to detail how a dual fee liability may arise.

It is sensible to detail any potential sub-agency arrangements.

Agency duration

If the agency is for a fixed period, this should be detailed together with the notice period and methodology of giving notice.

Related services

An agent should detail that they may be providing related (fee generating) services such as conveyancing, mortgages, removals etc. Where these are put in place, they should be separately confirmed in writing at the time.


An agent should state that they have permission to erect a For Sale board. This can always be struck out of the agreement if the seller insists.

Unoccupied Property

An agent should detail the extent of their liability with regard to unoccupied property.

Connected persons

The terms and conditions should include reference to Section 21 of the Estate Agents Act and ascertain whether there is any connected person or personal interest that may need disclosing.

Data Protection

Agents should be registered with the ICO and hold data as Data Controllers. Customers have the right to request details of what information is held about them. The agent can charge a small administration fee for the provision of this information.

Consumer Protection Regulations

It would be prudent to include reference to these regulations, explaining the need to identify and reveal material information that may affect a purchaser’s decision to transact. Using a specific property questionnaire may prove useful here.

Money Laundering Regulations

It would be prudent to include reference to these regulations and the requirement to verify the identity of sellers. This should cover how this will be done (physical documents or online)

Complaints procedure/Ombudsman/Redress Scheme

It is good business practice to outline the company complaints procedure and a mandatory requirement of redress/ombudsman membership to confirm details of membership and their modus operandi.

Right to cancel

Under Consumer Contract Regulations there must be a 14-day “cooling off” period included in the agreement if it was entered into away from the agent’s office or by post/email/online.

A prescribed form of cancellation notice should be included.

An agent can charge a pre-confirmed and reasonable sum for abortive costs should a client withdraw within the 14 days.


If the sales agent also provides lettings services, then it may be sensible to include a section on fees for lettings in the event of the agent negotiating a tenancy instead of a sale.

Energy Performance Certificate

The agent should point out the need for a current EPC. Of course, this may present another sales opportunity!


The agent should detail that they do not discriminate against any person for any reason.


Michael Day MBA FRICS FNAEA is in his 40th year in the estate agency profession (he says he started when he was three!). Through his businesses Integra Property Services and traceWise he provides a range of business mentoring, marketing, training and compliance services including online ID checks for money laundering compliance.


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  1. smile please

    No link to a copy we can use?

    1. Interested Observer

      Try this:

      1. smile please

        Yes a number of paid for ones you can purchase (same as we have).

  2. Trevor Mealham

    All good intel. The 14 day cooling off can be waivered by the client if they wish for immediate marketing. Again if the client signs in the agents office the 14 days waivers.

  3. Herb

    I wish agents were all licensed and their practices checked

    1. smile please


      What difference do you think it would make?

      1. Herb

        To check agents conform to the law on agreements/valuing/offers/epcs/fees making the profession more professional

        1. smile please

          Wont work i am afraid.

          Licensing is a myth it will weed out wrongdoers.

          There are very clear rules on what needs to be done but some ignore it. Bringing in licensing will only add an extra cost to agents already abiding by the law.

          I have numerous qualifications around property, i have subscribed to many bodies over the years. Does not mean anything unfortunately. Even an industry like finance the FCA only give guidelines.

          The only thing that needs to be brought in is being able to stop people trading as estate agents if they are convicted fraudsters etc.

  4. Interested Observer

    Compliant model sales agency contracts can be found here:




    1. Herb

      They are a year out of date Interested Observer


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