SRA Handbook

SRA Property Selling Rules 2011

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SRA Property Selling Rules 2011

The SRA Property Selling Rules dated 17 June 2011 commencing 6 October 2011 made by the Solicitors Regulation Authority Board under sections 31, 79 and 80 of the Solicitors Act 1974 and sections 9 and 9A of the Administration of Justice Act 1985 with the approval of the Legal Services Board under paragraph 19 of Schedule 4 to the Legal Services Act 2007 regulating the conduct of solicitors and their employees, registered European lawyers and their employees, recognised bodies, their managers and employees.

Part 1: Rules

Rule 1: Purpose

1.1

The purpose of these rules is to set out the standards which must be met by solicitors and others when they carry on property selling, either themselves or through their employees.

Rule 2: Application and interpretation

2.1

These rules apply to:

(a)

solicitors ;

(b)

recognised bodies ;

(c)

RELs or partners of RELs; and

(d)

persons  employed by RELs, their partners, solicitors or recognised bodies,

in any part of the UK.

2.2

The SRA Handbook Glossary 2012 shall apply and, unless the context otherwise requires:

(a)

all italicised terms shall be defined; and

(b)

all terms shall be interpreted,

in accordance with the Glossary.

Rule 3: Standards of property selling services

3.1

When providing property selling services, you must:

(a)

ensure that you, or any employees through whom the work is carried out, are competent to do so, and meet any standards of competence set by the Secretary of State under section 22 of the Estate Agents Act 1979;

(b)

not seek from any buyer a pre-contract deposit in excess of any limit prescribed by the Secretary of State under section 19 of the Estate Agents Act 1979; and

(c)

if you receive from any buyer a pre-contract deposit which exceeds the prescribed limit, so much of that deposit as exceeds the prescribed limit shall be either repaid to the buyer or paid to such other person as the buyer may direct.

Note

(i)

The requirements of rule 3 are in addition to the requirements in the SRA Code of Conduct in Chapter 1 in respect of client care.

Rule 4: Statement of agreement

4.1

When accepting instructions to act in the sale of a property, you must, at the outset of communication between you and the client, or as soon as is reasonably practicable, and before the client is committed to any liability towards you, give the client a written statement setting out whether or not you are to have "sole agency" or "sole selling rights". The statement must also include a clear explanation of the intention and effect of those terms, or any similar terms used, which shall, subject to (4.3) below, take the following form:

(a)

"Sole agency: You will be liable to pay a fee to us, in addition to any other costs or charges agreed, if unconditional contracts for the sale of the property are exchanged at any time: with a buyer introduced by us with whom we had negotiations about the property in the period during which we have sole agency; or with a buyer introduced by another agent during the period of our sole agency."

(b)

"Sole selling rights: You will be liable to pay a fee to us, in addition to any other costs or charges agreed, in each of the following circumstances:

(i)

if unconditional contracts for the sale of the property are exchanged in the period during which we have sole selling rights, even if the buyer was not found by us but by another agent or by any other person, including yourself; or

(ii)

if unconditional contracts for the sale of the property are exchanged after the expiry of the period during which we have sole selling rights but to a buyer who was introduced to you during that period or with whom we had negotiations about the property during that period."

4.2

If the statement refers to a "ready, willing and able" buyer (or similar term), you must include a clear explanation of the term, which shall, subject to (4.3) below, take the following form:

(a)

"A buyer is a "ready, willing and able" buyer if he or she is prepared and is able to exchange unconditional contracts for the purchase of your property. You will be liable to pay a fee to us, in addition to any other costs or charges agreed, if such a buyer is introduced by us in accordance with your instructions and this must be paid even if you subsequently withdraw and unconditional contracts for sale are not exchanged, irrespective of your reasons."

4.3

If, by reason of the provisions of the statement in which any of the terms referred to in (4.1) or (4.2) above appear, any of the prescribed explanations is in any way misleading, you should alter the content of the explanation so as accurately to describe the liability of the client to pay a fee in accordance with those provisions. Subject to this requirement, you should reproduce the explanations prominently, clearly and legibly without any material alterations or additions. They should be given no less prominence than that given to any other information in the statement apart from the heading, firm names, names of the parties, numbers or lettering subsequently inserted.

Note

(i)

The requirements of rule 4 correspond to those in the Estate Agents (Provision of Information) Regulations 1991 (SI 1991/859) and the Schedule to those Regulations. The requirements of rule 4 are in addition to the requirements in the SRA Code of Conduct in Chapter 1 in respect of client care.

Rule 5: Transactions in which you have a personal interest

5.1

When selling property you must comply with the following requirements:

(a)

If you have, or, to your knowledge, any connected person has, or is seeking to acquire, a beneficial interest in the property or in the proceeds of sale of any interest in the property, you must promptly inform your client in writing.

(b)

If you have, or to your knowledge any connected person has, a beneficial interest in a property or in the proceeds of sale of any interest in it, you must promptly inform in writing any person negotiating to acquire or dispose of any interest in that property. You must make this disclosure before entering into any negotiations with that person, whether or not you are negotiating on your own behalf or on that of a client.

Note

(i)

The requirements in rule 5 are in addition to the need to comply with the requirements in the SRA Code of Conduct in Chapter 3 about conflicts. The requirements in rule 5 are similar to those imposed on estate agents by the Estate Agents (Undesirable Practices) (No.2) Order 1991 (SI 1991/1032).

Rule 6: Waivers

6.1

The Board of the Solicitors Regulation Authority shall not have power to waive any of the provisions of these rules.

Note

(i)

The exemption from the Estate Agents Act 1979 is on the basis that the standards in these rules are complied with in all circumstances. For this reason there is no power to waive.