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

Estate Agent Ordered to Pay £790 for Failing to Disclose Competing Buyer

The Property Ombudsman has ordered an estate agent to pay £790 in compensation after failing to disclose the existence of a competing purchaser during a property transaction. The case highlights the importance of transparency obligations under the Code of Practice for Residential Estate Agents.

Margaret and Alan had their offer accepted on a property in December 2024 and received a Memorandum of Sale, which led them to believe the property would be withdrawn from the market. They then instructed solicitors and paid £790 for a mortgage valuation survey. On 7 January 2025, the agent informed them that the seller had decided not to proceed with the sale, without providing an explanation.

Three days later, Margaret and Alan learned through a third party that another buyer, Ashid, had been progressing a transaction on the same property at the same time. The agent stated that Ashid had originally agreed to a sale in October 2024, but the transaction stalled after a price renegotiation attempt. The seller then chose to continue discussions with both parties, intending to proceed with whichever buyer could complete most quickly.

Ombudsman Ruling on Code of Practice Breach

The Property Ombudsman’s adjudication found that the agent had not informed Margaret and Alan about Ashid’s ongoing interest when their offer was accepted or afterwards. The Ombudsman noted that the Code of Practice requires agents to keep buyers informed of other offers and to notify them promptly if a contract race is taking place. The seller’s decision to allow a contract race had been made before the buyers incurred survey costs.

The Ombudsman concluded that the agent failed to meet its obligations by not disclosing the existence of another purchaser and the contract race. The complaint was upheld, and £790 in compensation was awarded, equivalent to the cost of the mortgage valuation survey. The Ombudsman also indicated that further compensation could be considered for the inconvenience caused to the complainants.

This case serves as a reminder to estate agents of their duty to disclose competing offers and contract races, ensuring buyers can make informed decisions before incurring costs. The requirement for transparency applies across all property sectors, including build-to-rent and traditional sales.