Property Sourcers Must Be Aware of Material Information When Presenting Deals

When it comes to property sourcing and deal packaging, presenting accurate, comprehensive information is non-negotiable.

A recent report by the HomeOwners Alliance has shed light on a troubling reality in the property industry—many property listings are failing to meet the legally required material information standards. This issue doesn’t just affect estate agents but also property sourcers, deal packagers, and sourcing agents, who are integral to bridging the gap between deals and buyers. 

Failing to disclose necessary material information can harm relationships with investors, lead to legal consequences, and damage business reputations.

To help property sourcers and deal packagers better understand this issue, we’ve broken down what material information means, why it’s crucial, and how the lack of it can be detrimental.

What is Material Information and Why Does it Matter?

Material information refers to the essential facts and details of a property that buyers or investors need in order to make informed decisions - Tina created a video on just this last year - Watch here

These details include legally required specifications like energy performance (EPC rating), property tenure (leasehold or freehold), council tax band, ground rent, service charges, and more.

Why is this important? Presenting comprehensive and accurate material information ensures transparency and builds trust with buyers and investors. Without this information, buyers may face unpleasant surprises after committing to a deal, which could lead to disputes, legal claims, and reputational damage.

The Findings of the HomeOwners Alliance Report

The HomeOwners Alliance analysed 150 leasehold property listings across key portals like Rightmove, Zoopla, and OnTheMarket, and discovered alarming gaps in the provision of material information.

Key findings include:

• No Energy Performance Certificate (EPC): 24% of listings failed to include the EPC rating, a legal requirement since 2013.
• Lack of Service Charge and Ground Rent Details: Only 62% mentioned service charges, 49% included ground rent, and a mere 9% provided the next ground rent review date.
• Missing Council Tax Band Details: One-third of listings did not include the council tax band, with London properties being the worst offenders.
• EWS1 Certificate Omission: For high-rise properties, only 9 out of 45 listings referenced the EWS1 certificate—critical information for mortgage eligibility.

Paula Higgins, CEO of HomeOwners Alliance, commented on the findings, highlighting how this lack of information creates significant difficulties for homebuyers.

"We know location, price and parking are up there as the top things people look for when buying a home.

“But very quickly after that, we want to know about any potential deal-breakers: Is it a flat with only a few years left on the lease or sky-high service charges?"

Real-World Implications for Deal Packagers

For deal packagers and sourcing agents, failing to include material information in a deal presentation can have serious consequences:

• Misleading ROI Claims: Many deals advertised on platforms include projected ROI (return on investment) but omit essential details like the EPC rating, tenure (leasehold/freehold), or council tax band.
• Investor Disputes: Imagine an investor commits to a property deal, only to discover later that the property’s ground rent doubles every five years or that cladding issues prevent mortgage approval. Such oversights can lead to dissatisfaction, disputes, or even legal action.

To avoid these pitfalls, it’s essential to focus on clarity, accuracy, and transparency when presenting deals. Providing incomplete or misleading information isn’t just unprofessional—it could cost you your relationship with investors and tarnish your reputation.

Legal Risks

Failing to provide material information isn’t just bad for business—it’s potentially illegal. Trading Standards requires that material information impacting a potential buyer's decision must be presented upfront. Failure to do so could result in regulatory fines or, worse, legal claims from aggrieved investors.

Investors who feel misled may take legal action, particularly if their financial loss stems from missing or inaccurate information. With the stakes this high, ensuring compliance with material information requirements is critical.

How to Avoid Material Information Failures

Here’s how property sourcers and deal packagers can ensure they meet material information requirements every time:

1. Complete and Accurate Data Gathering: Before presenting a deal, collect all the essential details about the property, including EPC, tenure, ground rent, council tax band, and any relevant restrictions like accessibility or cladding issues.
2. Use Standardised Templates: Create or use a standard deal presentation template that ensures all required material information is included.
3. Perform Quality Checks: Review every listing or deal presentation to identify and rectify any missing or unclear information.
4. Stay Updated on Legal Requirements: Regularly refresh your knowledge of property compliance laws and Trading Standards requirements.
5. Use Authoritative Resources: Access tools and resources that help simplify data collection and compliance processes.

Exclusive Resources for NAPSA Members

If you’re a NAPSA member, you already have access to our full Material Information webinar, which provides detailed guidance on the types of information you need to gather before presenting a deal.

Additionally, approved members can download our custom deal presentation template, which ensures you include all the critical material information. The template saves you time and guarantees compliance—just update it for each new deal!

Not a member yet? Now’s the time to join and access these exclusive resources. Join for an entire year of 1-2-1 compliance and business support, access to a professional community, weekly resources and much more for just £195 +VAT: https://napsa.org.uk/join-us/

Watch Tina’s Video on Material Information

If you’re still unsure about material information requirements or need further reassurance, watch Tina’s insightful video from last year. It’s packed with actionable tips and clear steps to ensure your property listings meet compliance standards.

Watch Video Here

For property sourcers, deal packagers, and sourcing agents, adhering to material information requirements isn’t just about compliance—it’s about building trust and delivering value to your investors. Ensuring that all necessary details are thoroughly presented will set you apart in a competitive market and safeguard your professional reputation.

Take the first step towards mastering compliance today—watch Tina’s video or join NAPSA to access the exclusive material information resources. Your investors, and your business, will thank you!