Don't get in a knot over knotweed! | The presence of Japanese Knotweed

The Consumer Protection from Unfair Trading Regulations 2008 (“CPRs”) prohibit estate agents from engaging in unfair commercial practices when you deal with consumers.  ‘Consumers’ are individuals who are acting for purposes outside their business.  This goes further than just your actual or prospective clients or actual property buyers.  For example, if you are acting for a seller, ‘consumers’ also includes potential buyers or even potential viewers of the property.  ‘Commercial practices’ covers the whole range of your business activities that may affect consumers, for example your practices when you advertise your services, offer pre-agreement advice to a client, describe property for sale, negotiate and make sales, and handle complaints about your conduct.  ‘Unfairness’ may arise from: (a) giving false or misleading information to consumers (‘mis-leading actions’), or hiding or failing to provide material information to consumers about the presence of Japanese Knotweed (‘mis-leading omissions’).

Not disclosing the presence of knotweed on a property to potential buyers would constitute a ‘mis-leading omission’.  In the OFT’s ‘Guidance on Property Sales’ it states that “if you become aware that Japanese Knotweed is growing in the garden of a property you are marketing, perhaps because a buyer pulls out of a sale and tells you, then you cannot ignore the problem.  The appropriate action may be to talk to the seller and advise that an expert is brought in who can confirm whether there is a problem. The presence of Japanese Knotweed, or the risk that it may be present, is an example of the type of material information that you would be expected to disclose to prospective buyers once you knew of it”.

The consequences of a failure to comply with the regulations can be severe.  If you are convicted of committing a criminal offence under the CPRs the penalties are: on summary conviction a fine not exceeding the statutory maximum (currently £5,000); or on conviction on indictment in the Crown Court an unlimited fine or imprisonment for up to two years, or both.

In addition to the points above, a consumer may take their specific complaint against you to an approved redress scheme.  If the complaint is upheld, you may be required to apologise to the complainant and/or pay compensation of up to £25,000.  A serious breach of legislation and/or a recognised standard (for example a code of practice) could also lead to your dismissal from the approved redress scheme.  As it is a legal requirement for you to belong to such a scheme, you would no longer be able to trade as an estate agent.

In addition to the CPRs your clients have to complete the Law Society’s property information form, or TA6 form.  Question 7.8 asks the seller whether the property is affected by Japanese knotweed. If you are assisting a seller, you should not encourage them to provide misleading information about the knotweed on their property.

If your client knowingly gives false information on this form, they open themselves up to a future claim for misrepresentation.  This is because the buyer will have relied on a false statement of fact when entering the contract with your client.  This in turn could lead to a claim against you by your client for professional negligence.

The presence of knotweed is seen as a barrier to sale owing to the fact that where it is identified on a property most banks/building societies will not lend unless there is a treatment programme in place which is backed-up by a guarantee.  This can be expensive and delay or frustrate a sale.  This need not be the case.  Japanese Knotweed Claims will start the process of recovering the cost of the treatment and guarantee; and will also arrange for an eradication company to devise a treatment programme and arrange an insurance-backed guarantee (this should take no more than 48 hours to put in place).  By doing this you will: (1) ensure that you and your client comply with the requirements of the CPRs and TA6; (2) allow your client to sell its property at full market value and recover the cost of any treatment programme and guarantee; (3) be less likely to lose a buyer once an offer has been accepted.

Japanese Knotweed Claims operates on a ‘no win, no fee’ basis, so would only suggest this method to clients of yours where it was highly likely that they could recover the cost of the treatment and guarantee.

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