A Consultation on Revisions to the Search Code

 

“When problems occur they affect the value of properties, cause delay to the transaction, give rise to added costs or cause unnecessary distress”.
                                                OFT Searches Market Study 2005                                                   

 

The Council of Property Search Companies (CoPSO) set up the Search Code as a direct response to the OFT Market Study to ensure that the industry took the necessary steps to prevent these problems arising. Since 2006, CoPSO’s Search Code has stood as a gold standard for quality, reliability and the highest standards of consumer protection in the search market.

The Code’s standards of best practice have been kept under constant review and revision so that they continued to provide a greater degree of protection than the minimum requirements set out in the Home Information Pack Regulations.  Now that those Regulations, and their legal framework underpinning local searches have been suspended, it is right that we continue that process of scrutiny - remaining mindful of the need for a credible commercial and competitive search market that maintains high standards in all products wherever they originate.

This consultation document proposes a new quality standard to ensure that the system of voluntary self-regulation remains robust. The Code must remain fit for purpose so we are also seeking views on these proposed changes and possible future amendments to ensure it continues to meet the demands and requirements of the 21st century property market.

Proposals for Consultation
We are proposing the following four key changes and inviting views and comments 31st August:

• Branding: as a voluntary Code will be the only regulatory framework in the sector going forward we are keen to ensure that compliant - and therefore reliable – products are clearly badged and identified. We are therefore proposing that all compliant products should carry the Search Code logo on the front page.

 

In addition, we are starting the process of seeking OFT approval of the Search Code as this would give a clearer signal to the market of the robustness of the self-regulatory scheme. OFT approval is conditional upon subscription being restricted to members of the relevant trade body in order to more effectively influence commercial behaviour. We are therefore seeking industry views on bringing the Code in-house but as a preliminary step, proposing that compliant reports must also carry a trade body logo.

• Compliance: we are proposing to make it a requirement that compliance with the Code and associated protocols is specifically referred to in a firm’s terms and conditions. In addition, it will be a requirement for a subscribing firm to only contract with 3rd party suppliers who meet equivalent standards. This will ensure a  consistent approach to standards and liability all the way up and down the information chain, giving customers a greater degree of confidence and protection. We are proposing to work with data providers to develop a protocol to identify  legitimate and authoritative sources.

 

• Completeness: the Code has always required subscribers to provide complete search reports for HIP Searches and we are not proposing to amend these at this point in time. We will retain the same standards of completeness, accuracy and identification of the sources of information used to compile the report in respect of local searches in order to ensure there is no diminution of quality or increased risk of consumer detriment.

We are proposing to work with bodies representative of stakeholder customers of search providers in order to identify what they want a Search Code backed search to provide and the quality guarantees they are looking for. This will result in a new protocol on local search content.

The Search Code is independently monitored and proactively enforced by the Property Codes Compliance Board. In consultation with search providers, we will also seek to refine and refocus the existing compliance regime making it more robust and rigorous.

• Insurance: private sector products have always carried robust and specific insurance. Not just professional indemnity cover, but also specialist search insurance to protect all parties to the transaction, run-off cover should firm’s cease trading and instant response cover. The Search Code signals the highest level of professional protection. Local authority products are arguably less well indemnified

 

We recognise, however, that in the past the cover afforded by specialist search insurance has been misapplied to cover missing data that could otherwise have been readily obtained. The search market has moved on considerably since then and most information is now commercially and readily available from local authorities and other data providers. Whilst Search Code compliant reports must therefore be backed by insurance – for the reasons set out above – they may not use it in lieu of data unless that information is genuinely unavailable.

We are proposing to work with industry partners, insurance providers and other stakeholders to develop a protocol to clearly proscribe the use to which search insurance may be put. We will also seek to influence the drafting of insurance policies. 

Conclusion
Our purpose in retaining and refining the Search Code is to send a clear message to consumers, their agents and advisers - if you want to be sure of the completeness and accuracy of the property information you receive only use a Code subscriber. The revised Search Code is your guarantee of a quality, value-added product. Backed by independent redress and comprehensive insurance it is the gold standard of reliability. Subscribers to it are the best in class – efficient, effective and subject to rigorous and continuous scrutiny.

The retention of a strong self-regulatory regime which sets standards at least as high as those guaranteed under the HIP Regulations is a robust response to any critics. The publication of a consultation document signals our commitment to continuous development and improvement in partnership with all stakeholders. We welcome you comments and input to help us deliver it.
CONSULTATION QUESTIONS

Branding & Identification

• Do you agree that it should be a requirement for all searches produced by a company to be Search Code compliant? Should there be an option to allow customers to request a different product or for firms to offer a more flexible service to cater for different markets?
• We are seeking OFT approval for the Search Code. This may require us to limit subscription to the Code to appropriate trade body members. CoPSO currently owns the Search Code and a strict interpretation of OFT requirements would prevent non-CoPSO members from subscribing separately to the Search Code. Do you agree with this proposal? If not, why not?

Compliance

• Do you agree with the proposal to restrict Code subscribers from contracting with 3rd parties which do not meet comparable standards? If not, why not?
• In order to support this proposal, we are currently working with data providers to develop a set of protocols covering liability, provenance, accuracy and storage of information. This would apply to all data sources, including derived data – requiring new data to be added within 20 working days and defining legitimate data sources as being derived from primary records only etc. Do you agree with this approach? What else would you like to see included in a protocol for data providers

Completeness

• Do you agree with the proposal to retain the same requirements on completeness, accuracy and identification of information for local searches as were required under the HIP Regs? If you believe any requirements should be reduced, removed or amended, please let us know and provide additional supporting information.
• We are proposing to develop a new protocol on search content to under-pin the new self-regulatory framework. What would you like to see in this protocol? Is there anything not currently included within the CON29 or CON29DW which you would find helpful eg plain English consumer-facing summaries, additional detail
• Should this protocol and overall approach be extended to other types of search report or all reports produced by subscribing companies?
• What would you like to see from a new compliance regime to enforce this?

Insurance

• Do you support our proposals to restrict the use of ‘no answer’ insurance in respect of local searches? Should this approach be extended to all searches?
• We will develop a protocol to restrict the use of insurance – for example, to instances where the information is genuinely unavailable under any circumstances or where a client asks that a particular question remains unanswered. It would also define when information is commercially and readily available. Do you agree with this approach? What should such a protocol contain?

If there are any additional points you wish to raise, please include them in your comments. Responses to this consultation should be submitted to info@copso.org.uk by 31st August 2010. For further information, please contact Kate Nicholls on 07958 796 238