It’s hardly a typical transaction but a case about a London villa with a moth infestation has highlighted how important it is for agents to get the whole ‘material information’ issue right.

In case you hadn’t heard about it, a purchaser couple won a High Court claim against the vendor of a Notting Hill mansion which was sold for a cool £32.5m. It turned out to have an infestation which at one point involved the purchasers having to kill some 100 moths a day.

The judge sided with the purchaser and suggested the vendor “knew there was or may have been a serious infestation of moths requiring removal of all the natural insulation in the house and had received and read at least two reports from a pest control company.”

The purchasers won what were described as “substantial” damages and the consequences of the case will undoubtedly set alarm bells ringing for agents concerned at how pre-contract enquiries should be answered – and what is regarded as Material Information.

Before it reaches a courtroom 

This example is one of extremes of course: an ultra-expensive property with a highly unusual problem creating a vast amount of publicity.

But more typical properties with more familiar issues about rights of way, flood risk or planning consent are just as fraught with potential problems for agents and vendors alike – and that’s what the introduction of Material Information requirements is supposed to bring to light, long before it reaches a courtroom.

Yet it seems many properties are still marketed without all Material Information included in their details.

An audit in November by a property industry supplier found no fewer than 133,000 homes listed on the major portals allegedly lacked complete material information. And that was on a test of only two aspects of Material Information – there are about 25 in all.

In more detail, over 20,000 properties did not have the necessary tenure information – freehold, leasehold, etc. And only 75% of listings at the time included information about parking, leaving 25% without.

Then just last month, January, one in five vendors questioned by the same industry supplier said their agent hadn’t told them about Material Information requirements – meaning many of the sellers had not supplied the required info.

It’s early days, of course, and agents have plenty of other regulations to handle, in addition to the actual job of selling homes for clients.

But I believe the critical point is for agents not to get into the habit of missing out the Material Information that’s required – sooner or later this is going to turn around and bite, with possible legal action from disgruntled buyers or sellers.

You’ll be aware of this I’m sure but as a shorthand reminder, Material Information is split into three parts – all required on property details, and website and portal listings.

Part A includes a council tax band, asking price, and tenure information. Part B includes the physical characteristics, the number of rooms, and how utilities are provided. Part C includes listed building status, unsafe cladding issues, and planning permissions.

Making sure every listing has all of this information isn’t just a box-ticking exercise to please Trading Standards – for a start, quite aside from reputational damage, non-compliance can mean hefty fines and even a lifetime ban as an agent. Ultimately, non-compliance could even lead to a two-year prison sentence.

Allows problems to be seen early on

But these new requirements have real benefits to agents, in my opinion.

Fewer ‘unknowns’ about a property when a buyer scours the portals or shortlists a home as a possible to view, really helps agents.

There will be fewer wasted hours on viewings when a buyer turns up and quickly realises there’s a problem which – perhaps – could have been identified online if there had been more details given.

Follow that principle to its obvious conclusion and it’s easy to see there will be fewer fall-throughs because Material Information allows problems to be seen early on, and not just when a search or a mortgage lender identifies a hiccup. 

The government appears to be taking more interest in the whole problem of fall-throughs, as its recent initiative on digitising the transaction process has shown.

As ever, the more we get ahead of the curve on changes like Material Information, the better it reflects on the industry in the eyes of government and, more importantly, consumers.

Thanks for your time – and see you next month!

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Phil Spencer is the founder of Move iQ. Move iQ nowcreate bespoke video content for estate and letting agents sharing local insight and personally introduced by Phil – to secure your exclusive post-code speak to Alex Wilson [email protected]