Record Number of Claims Against Estate Agents
Christopher Hamer (Property Ombudsman) has publicly announced a record number of claims against property professionals in 2010. He received over 1,300, the highest figure in 20 years and an increase of over 25% from 2008. Mr Hamer has stated that if a complaint is justified he can make a payment of up to £25,000. Due to this, Mr Hamer has advised that any potential buyer makes sure their estate agent has professional indemnity cover in place (noted on his website).
As a result of this, national bodies like NAEA (National Association of Estate Agents) have made it compulsory for estate agents to have a current professional indemnity policy in place before they can become a member of their association.
What is estate agents professional indemnity insurance?
This is a policy that covers estate agents/letting agents in the event of a claim being made against them. In essence, it ensures cover when any professional service provided by the agent results in their client suffering a financial loss.
Further information can be found at www.endsleigh-business.co.uk
Professional indemnity cover primarily provides protection from accusations of poor advice and malpractice. Shown below is a perfect example of a claim made against an estate agent:
An estate agency valued a client's house and it was then placed on the market. The estate agent advised that the property would sell quickly, so the landlord then bought an additional property. The landlord realised that after languishing for a long period on the market the house had been over-valued and was eventually sold at a lower price than anticipated. A claim was successfully brought for loss of bridging finance and other expenses incurred.
Professional indemnity insurance is not mandatory for estate agents, but as you can see there is an increasing number of claims being made.