TPO and PRS redress schemes, the Material Information rule and PI claim overlap

Estate and letting agents in England, Wales and Scotland must belong to an approved redress scheme. The two principal schemes are The Property Ombudsman (TPO) and the Property Redress Scheme (PRS). Membership is required by section 83 of the Enterprise and Regulatory Reform Act 2013 and the related Estate Agents Act 1979 framework, and by the Letting Agents (Redress Scheme) (England) Order 2014 for lettings work. Failure to belong to a scheme is enforceable by Trading Standards.

The Material Information regime

The Consumer Protection from Unfair Trading Regulations 2008 (CPRs) require that property listings disclose all "material information" — information the average consumer would need to make an informed transactional decision. National Trading Standards (NTSELAT) published guidance in three parts, finalised through 2022 and 2023, setting out parts A, B and C of the material information required on every property listing. Part A applies to all listings; parts B and C add sale-specific and lettings-specific items.

The PI overlap

A redress scheme adjudication is not, by itself, a PI claim. The scheme awards are typically modest, but they sit alongside the consumer's right to bring a civil claim. Where a Material Information omission has led the consumer to incur loss — buying a property they would not have bought, paying a rent they would not have agreed — the consumer may bring a civil claim under the regulations or in negligence. PI cover responds to the civil claim, not to the scheme award (which is paid by the agent direct).

The cladding and leasehold context

Material Information rules apply with particular force to leasehold properties and to flats in cladded blocks. The agent must disclose ground rent, service charge, lease length, building safety status, EWS1 position where applicable, and any material defect known to the agent. The Building Safety Act 2022 created a statutory route for leaseholder protection from cladding remediation costs (sections 116 to 125 of the Act and Schedule 8). An agent who has marketed a flat without disclosing the building safety position may face both a redress scheme complaint and a civil claim for loss.

Lettings and the Renters' Rights Bill

The Renters' Rights Bill, expected to take effect in 2026, will reshape the assured tenancy regime by abolishing section 21 notices, regulating in-tenancy rent increases, and introducing a Decent Homes Standard for the private rented sector. Letting agents who advise landlords through the transition face a fresh set of exposure points: incorrect advice on notice service, mis-management of rent reviews, and Decent Homes non-compliance. PI cover responds to the advisory failure where the firm has been negligent.

Our estate and letting agents PI insurance guide sets out the redress-scheme position, the Material Information regime and the cover scope in detail. Block management, property management and tenancy management businesses face parallel exposures covered in our property managers PI insurance guide.

Client money protection

Letting agents and property managers in England that hold client money must belong to an approved client money protection (CMP) scheme under the Client Money Protection Schemes for Property Agents (Approval and Designation of Schemes) Regulations 2018. CMP is separate from PI; it protects client money against firm insolvency or misappropriation. A claim for negligent advice still requires PI.

The Estate Agents Act 1979

The Estate Agents Act 1979 remains in force alongside the CPRs and the redress schemes. The 1979 Act contains the disclosure requirements at sections 18 and 21 for fees, services and personal interests. A failure to disclose a personal interest in a transaction can be both a 1979 Act breach and a PI exposure.

FOS and the FCA fringe

Some property-related activities cross into FCA-regulated territory — for example, regulated mortgage advice given by an agent in conjunction with a sale, or insurance distribution where the agent arranges policies. Those activities sit under separate FCA permissions and a different PI regime under MIPRU 3.2. Mixed permissions need mixed cover.