Professional Indemnity Insurance For Estate Agents
Professional Indemnity insurance can cover liability issues concerning estate agents, such as professional negligence claims. Since, without PI in place, litigation can prove to be very expensive it's a sensible precaution to ensure that you are covered. This applies even when you know you have a strong case.
In order to make sure that any estate agent has the right type of PI for their specific and relevant needs, they should seek expert advice in the first instance. PI is in place to protect any estate agent from the claims of dissatisfied clients. Issues can range from a client thinking they"ve not been given the right information about aspects of a property, to there being an instance of a property being deliberately undervalued.
A client may also decide to take action if some work was promised on part of a property before purchase and it's not either not done, or carried out to a poor standard, particularly if the client suffers loss as a consequence.
Landlords may also launch claims when their tenant proves not to be reliable in terms of paying their rent. If the tenant leaves the property and can't be located, then the letting agent can then be facing a claim from the landlord, because of a failure to get a guarantor.
Estate agents should contact their insurers early enough if there is the possibility of a claim. Choosing to try and resolve problems with a client can backfire if a dispute drags on - as it could then be too late for the claim to be accepted by the insurance company.
Agencies can strengthen their position by being members of related associations. Whether it's as a a member of the National Association of Estate Agents (NAEA) or the Association of Residential Letting Agents (ARLA). For members of the latter it's mandatory to be covered by PI.
Selling or letting property - what is the worst that can happen?
It would be fair to say that the estate agent gets enough bad press and barbed comments from all areas of the media as it is. This happens whilst just doing the job they are paid to do, so any additional attention brought down upon them in unintentional ways is probably best avoided. The following examples did not really help themselves.
Bad manners can cost
DJ Chris Evans was a regular in the Hampshire port of Lymington, and on one such visit a house up for sale caught his eye in an estate agent window. A lovely river-side property with some very attractive features, Evans was drawn to it immediately.
A helpful and friendly lady enthused over the house to Evans and gave him a brochure to look over. The brochure confirmed to Evans that his interest was not misplaced and he was considering arranging a viewing. Cue the estate agent with a manners issue, and perhaps not up on his celebs.
After loudly asking if he could help at all, and Evans replying no thanks, and that the lady has been more than helpful, the estate agent requested his home address if he was interested in the house. People in the public eye are not not keen on giving out their home addresses and Mr Evans politely refused this bit of information, at which the agent promptly grabbed the brochure from Evan's hand and took off with it. It only took thirty seconds to realise his huge error, running down the street, sheepishly calling “Chris, Chris” as he tried to make amends. Too late, though; that was the end of a potential sale. Neither Evans nor the vendor sued the estate agent - but it would have made an interesting case.
Who turned the channel over?
The upmarket Notting Hill estate agents were locking up at the end of the day, going home happily knowing their screens in the window would still be marketing their prestigious properties. Wrong! Instead passers-by were greeted by a late-night adult TV channel, with women on screen that certainly did not leave anything to the imagination. Some passers-by were shocked, some amused, some dare say stayed in the vicinity for a while.
The estate agents blamed it all on a prank, and that it must have been someone using a universal remote to change channels from outside. This they assure the good people of Notting Hill has now been corrected so that it can not happen again. One wag commented that since no publicity is bad publicity they should do it more often.
Always check the small print
In New Zealand an estate agent oversight was to prove very costly in finalising the sale of a $3.7 million commercial property. GST, The goods and services tax on the property, was meant to be extra to the purchase price but the estate agent failed to cross off the words "GST Inclusive" from the standard sales contract.
This costly oversight was brought to the estate agent's attention by the client, but when approached, the purchaser refused to adjust the agreement. This meant a cost to their client of over $70,000, and a censure for the agents.
Two-bed Victorian house with slightly dodgy industrial potential
The estate agent photos for the £130,000 Victorian house in Bristol contained all the usual representations of the main rooms, plus one with some old stuff left by the previous tenants. It was eagle-eyed house hunters online that recognised that the assorted pipes, cables, fans and soil were in fact drug making equipment. Indeed the house had been used as a cannabis farm, and when the police made their raid they took away the plants and any useful evidence. Everything else was just put out of working order.
After bemused potential buyers had made the agents aware of what their photo was showing it was hastily removed from their website, presumably increasing its selling potential.
In-house morale boosting
One upmarket agency was guilty of giving out a little too much information when a secretary accidentally sent out the agenda of a forthcoming meeting to the staff. It was bad enough that the document included the company's plans for cost-cutting, including redundancies. The spicy bit was that the document contained a list of names from rival firms that they hoped to poach.
It is not really for sale, honest
According to a local newspaper Property agents Savills were in a bit of bother with their clients when posting on their website that a major regeneration site in Worthing was up for sale. Hanson Capital Management had plans to replace the existing run-down buildings on the site with a new mixed-use development that would act as a new gateway in to the town centre. Following significant investment in the project, the capital management company, which was already facing accusation of foot-dragging, were far from happy at the impression the sale sign gave that they were abandoning the project.
The employee who posted the site as up for sale was moved to a new department within Savills.
Estate and letting agents are always prone to taking photographs that can be mocked for one reason or another, or for describing homes for sale in terms that people find amusing. However the above examples show that sometimes these little oversights can be the least of your problems on a difficult day.
We do not give financial advice on this website. If in doubt get professional advice and always read the policy information before purchasing an insurance contract.