Editor's note: This brief was summarised by The Property AI Newsroom from a report by The Negotiator. Read the original article for full details.

Estate Agent Ordered to Pay Compensation for Failing to Disclose Competing Buyer

The Property Ombudsman (TPO) has ordered an estate agent to pay £790 in compensation after failing to disclose the existence of a competing buyer. The case reinforces the importance of transparency during the property sales process, particularly for buyers incurring costs.

Margaret and Alan, the complainants, had their offer on a property accepted in December 2024. After receiving a Memorandum of Sale, they believed the property would be removed from the market and proceeded to instruct solicitors and commission a mortgage valuation survey costing £790.

On 7th January 2025, the agent informed Margaret and Alan that the seller would not proceed with the sale, without providing an explanation. Three days later, they learned from a third party that another buyer, Ashid, had also been progressing a transaction on the same property. The agent later explained that Ashid had agreed to a sale in October 2024, but after a stalled negotiation, the seller decided to continue discussions with both parties, opting to proceed with whichever buyer could complete the sale most quickly.

TPO’s investigation considered the Code of Practice for Residential Estate Agents, which requires agents to inform buyers of other offers and to notify them if they are involved in a contract race. The Ombudsman found no evidence that Margaret and Alan were informed about Ashid’s ongoing interest or that they were in a contract race, even though the seller’s decision to allow a contract race was made before the buyers incurred survey costs.

The Ombudsman concluded that the agent failed to meet its obligations under the Code by not disclosing the existence of another purchaser and the contract race. This lack of transparency denied the buyers the opportunity to make an informed decision about whether to proceed and incur further expenses.

The complaint was upheld, and the Ombudsman awarded £790 in compensation, equivalent to the cost of the mortgage valuation survey. The decision highlighted that buyers should be made aware of competing offers and rival purchasers so they can make informed choices before incurring costs.