Consumer information on real estate properties

AuthorConsumers, Health, Agriculture and Food Executive Agency (European Commission), Deloitte consortium, IPSOS, London Economics
4. Consumer information on real estate properties
This chapter c onsiders information delivered to consumers on th e characteristi cs of a
property, as well as on prices and fees related to the transaction. It addresses the minimum
standards of information, whether information is clear and comparable, and the consumer
understanding of real estate advertisements.
Box 2: Summary of findings Consumer information on real estate properties
The minimum standard of information varies in buying and renting
scenarios. In the former, the type and detail of minimum information to be provided,
which might vary, is legally specified in some countries, albeit not all . In this regard,
if there is a mortgage, the ESIS is a useful standardising tool providing consumers
with all relevant financial information on the loan to make an informed choice. In the
latter, minimum standard of i nformation is significantly less well defined, and
provided details tend to focus on payment and costs, rather than about property
More precisely, consumers (of both buying and renting scenarios) seem to experience
the greatest difficul ties obtaining informati on on real estate agency fees, energy
performance of the property and charges for utilities.
Transparency of information , including clarity and comparability of information
towards consumers, remains a challenge in the real estate market. On ly a minority
of survey respondents considered the information very clear and comparable. This
was consistent with answers from focus groups where information was regarded both
difficult to find and difficult to understand. It was furth er va lidated in the mystery
shopping results, where buyers and renters consid ered the overview information to
be insufficient, particularly as it relates to amenities and energy performance. These
challenges were heightened in the case of cross-border transactions.
The consumer understanding of the real state advertisement was tested in
relation to the size, energy performance and key features of the property. The most
successful means of presenti ng that information are detailed in this section. Thi s
understanding was also conditional to information-framing practices. Interestingly,
real estate consumers do not seem to reach a peak of i nformation overload and
appear to have a preference for ever-more information.
A standardised list of pieces of information would be benefici al for consumers
since it woul d improve consum ers' understanding of the i nformation they shoul d be
aware of, and deliver a defi ned and comprehensive set of pieces of information on
the property of interest.
4.1 Minimum standard for information on properties
This section presents the minimum standards for information provision, namely the pieces
of information that need to be delivered to consumers as established by the law. A
distinction is made between the minimum stand ards for information regarding the
conveyancing process and the renting/letting process. In both cases, e xamples are
provided for the countries in scope of the study. The current study shows that there various
differences across countries as regards the mandatory pieces of information to be conveyed
to consumers.
While the current section focuses on minimum standards of information, findings on
possible ways to improve information provision about properties on the market are
provided in Section 9.3.
4.1.1 Conveyancing process
The question related to the pieces of information that need to be mand atorily delivered to
consumers (to buyers, in particular) during the conveyancing process is addressed in the
following paragraphs, and the main scenarios identified through the country fiches are
Firstly, in some countries, a defined list of mandatory pieces of information that shall
be delivered to consumers is incl uded in the legislation. To provi de an example based
on the data collected through the country fiches, in Romania, Art. 94 of th e Government
Ordinance no. 21/1992 on consumer protection establishes that information must be
provided in writing before concluding a contract with the real estate agent. In specific,
information about the following items shall be provided to consumers:
Prices on the market for properties of the type which is of interest for the consumer;
Deficiencies and inconveniences of a property of interest for the consumer that are
known by the real estate agency;
Fees applied by the real estate agency;
The legal situation of the immovable property, and
An estimated level of costs to be borne by the consumer in order to obtain and draft
the documents related to the transaction.
In Sweden, accordin g to Art. 18 § EAA, the real estate agent must provide a prospective
buyer with a description of the property by specifying:
The taxable value and operating costs of the property;
The area in which the property is located;
The presence of any mortgages, easements, or other encumbrances;
The presence of any joint facilities, and
The year of construction, the size and the type of the property.
Secondly, in some countries, the national legislation does not establish a specific
list of minimum standards of information that needs to be conveyed to consumers. This
seems to be the case for Croatia, E stonia, Hungary, Latvia, the N etherlands, Poland,
Slovakia (no minimum standards of information to be delivered at the outset of the
transaction), an d the UK (England and Wales). In some cases, there is no obligation to
inform parties about circumstances of which parties could not reasonably expect to be
In other countries, despite the fact that a clear list of mandatory pieces of information is
not defined by law, the national legislation establ ishes that professionals need to provide
consumers with comprehensi ve advice and with all information that they know or
should know. In this case, rather than covering a detailed list of elements (related to the
conveyancing process or to the property itself) that shall be disclosed to consumers, the
national legislation indicates on a general note that all circumstances that are necessary
to carry out the transaction need to be disclosed. In Austria, for example, all circumstances

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