ASA Adjudication on RE/MAX Estate Agency

Ad

A brochure, for estate agents RE/MAX, and an ad on their website offered two semi-detached properties in Dundonald, Co. Down, Northern Ireland. It stated "RE/MAX ... is pleased to offer for sale this potential development site circa 0.8 acres ..."

Issue

A local resident believed the ad was misleading because he understood the property was leasehold and subject to covenants that prevented building on the land.

CAP Code (Edition 11)

Response

RE/MAX said they understood that approximately 95% of the housing stock in Northern Ireland was leasehold and virtually all had restrictive covenants. They said most new freehold properties also had restrictive covenants. They said they ensured that their ads were accurate and conformed to the Property Misdescriptions Act 1991. RE/MAX said all their advertising for potential development sites stated "Purchaser should seek relevant planning approvals" and, in addition, all enquirers were made aware that there were restrictive covenants in place.

Assessment

Upheld

The ASA understood that the majority of property in Northern Ireland was leasehold and subject to various restrictive covenants. We noted RE/MAX said all their advertising for potential development sites included a disclaimer warning that purchasers would need relevant planning approvals. However, we noted the ads for the Dundonald, Co. Down properties did not include the disclaimer, although we acknowledged that it was included in later advertising for the properties.

We understood that the covenants attached to the Dundonald properties prevented the building of more than one dwelling on either of the two sites. We noted the properties were offered for sale as a potential development site but, in order to develop the site, a purchaser would need to make an additional purchase of the freehold or have the covenants varied, neither of which we understood was currently likely. We understood that the freeholder did not intend to sell the freehold or vary the covenants.

We considered that the ads implied the properties at Dundonald were available as a development site but, because this was not possible without either an additional purchase or acquiring a variation to the covenants, which appeared to be unlikely, we concluded that the ads gave a misleading impression of the properties for sale.

The ad breached CAP Code clauses 3.1 (Substantiation) and 7.1 (Truthfulness).

Action

We told RE/MAX not to advertise the Dundonald, Co. Down properties as a potential development site without making clear that restrictive covenants might prevent such a development.

Adjudication of the ASA Council (Non-broadcast)