If your agency is a member of The Property Ombudsman (TPO), you are bound by its Code of Practice. The code sets out the standards of conduct expected of agents in their dealings with sellers, buyers, landlords, and tenants. Breaching the code can result in complaints, compensation awards of up to £25,000, and — in serious cases — expulsion from the scheme.
This article summarises the key rules that most commonly arise in practice.
Transparency and Honesty
The code requires agents to act with integrity and to communicate clearly and honestly. This means:
- Providing clear written terms of business before entering into an agency agreement
- Disclosing all fees, charges, and commissions — including any referral fees you receive from third-party services such as mortgage brokers, conveyancers, or surveyors
- Not misleading buyers or tenants about the nature of the property, its features, or its price
- Passing on all offers to the seller promptly and in writing, unless the seller has given written instructions not to receive offers below a certain level
Handling Offers
One of the most common areas of complaint is how agents handle offers. The code requires you to:
- Forward all offers to the seller promptly, accurately, and in writing
- Not discriminate against buyers who do not wish to use your recommended services (mortgage, solicitor, etc.)
- Confirm receipt of offers to the buyer
- Inform all prospective buyers of the existence of other offers (though not the amounts) when applicable
Referral Fees and Connected Services
Agents must disclose any financial interest in services they recommend. If you receive a referral fee for recommending a conveyancer, mortgage broker, or surveyor, you must tell the client in writing before they agree to use that service. The amount or basis of the referral fee must also be disclosed.
Client Money
If you hold client money (deposits, rent, etc.), the code requires you to:
- Hold it in a designated client account, separate from your business funds
- Have Client Money Protection (CMP) insurance in place
- Provide clear accounting to clients on request
Complaints Handling
Every TPO member must have a written in-house complaints procedure. When a complaint is received, you must:
- Acknowledge it promptly
- Investigate it thoroughly
- Provide a final response within a reasonable period (typically 8 weeks)
- Inform the complainant of their right to escalate to TPO if they are not satisfied
Common Reasons for Complaints
- Failure to pass on offers
- Misleading property descriptions or photographs
- Hidden fees or undisclosed referral arrangements
- Poor communication during the sales process
- Failure to handle deposits correctly
- Not following agreed marketing instructions
Consequences of Breach
If TPO upholds a complaint, it can direct you to apologise, take specific remedial action, and pay compensation. Failure to comply with a TPO decision can result in expulsion from the scheme — which effectively means you cannot legally trade as an estate agent.
The full TPO Codes of Practice for Residential Estate Agents and for Residential Letting Agents are available on the TPO website. All agents should read the full code applicable to their business, not rely solely on summaries.