Estate agencies accused of operating cartel

Four Berkshire estate agents have been accused of illegally fixing fees and working as a cartel by the competition watchdog.

The agents broke competition law by agreeing minimum levels of commission on sales of properties for almost seven years from September 2008 onwards, according to the Competition and Markets Authority’s provisional findings.

The agencies were Michael Hardy, Prospect, Richard Worth and Romans (for full details of trading names see below).

The CMA says that price-fixing prevents home owners from being able to shop around to get a better price when selling their properties.

Its provisional findings are that:

  • The agents agreed to apply minimum commission rates for residential property sales.
  • They exchanged confidential pricing information.
  • They held meetings and colluded to make sure that they were all enforcing and maintaining the agreed minimum commission rates.

It is the third case brought against estate agents in recent years relating to the CMA’s work on tackling cartels.

Four estate agents in Somerset were previously fined over £370,000 for colluding to set minimum commission rates and three members of the Three Counties Estate Agent Association were charged £735,000 for breaking competition law in relation to estate agent and letting fees.

The four agents in today’s announcement now have the opportunity to respond to the CMA’s provisional findings.

The watchdog will then carefully consider any responses before any final decision is made.

CMA senior director Howard Cartlidge says: “Everyone knows selling your home is expensive.

“So it’s important that people should be able to shop around all of their local estate agents to make sure they are getting the best possible deal.

“Estate agents who conspire to set minimum commission rates are cheating homeowners and breaking the law.

“Where we find evidence that this is happening, we will not hesitate to take action to protect people selling their home.”

Romans chief executive Peter Kavanagh says: “In June 2017, senior directors of Romans became aware that, some years ago, a small number of Romans Residential Sales executives across a few branches had acted in a manner totally contrary to the standards and values of the company.

“We immediately alerted the CMA about this matter and have assisted with the CMA’s subsequent investigation under its leniency programme.

“We also undertook our own investigation and, based on our findings, have taken the appropriate disciplinary action against those individuals involved.

“We also reviewed and strengthened our training, management and compliance procedures to ensure that all our staff act with integrity at all times and adhere to the company’s high ethical standards.

“We are truly sorry that the judgement and behaviour of these individuals did not meet the standards of behaviour expected by our people, our customers and our colleagues in the industry.”

The full trading names of the four agencies are:

  • Michael Hardy & Company (Wokingham) and Geocharbert UK – together known as Michael Hardy.
  • Prospect Estate Agency and Prospect Holdings (Reading) – together known as Prospect.
  • The Romans Group (UK) and Romans 1– together known as Romans.
  • Richard Worth Ltd (in administration) and Richard Worth Holdings– together known as Richard Worth.
  • But the CMA notes that Adelfas Property Group, which is currently trading as Richard Worth Estate and Land Agents, is not one of the companies subject to this provisional decision.

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