REsidEnTiallettings
Letting update
New regulations governing cancellation of contracts
were introduced last year. Stephen Fowler explains
how it affects landlords.
Selected extracts from the Consultation
UK’s most respected legal Due to increasing disquiet from consumers regarding the issues
and technical guide for around ‘door step’ and ‘distance’ selling, the Government
letting agents and landlords. introduced the new regulations on 1 October 2008.
One of the best sources for The Cancellation of Contracts made in a Consumer’s Home
indepth information on the or Place of Work etc. Regulations 2008 affect all businesses
legalities of residential lettings supplying goods and services to consumers, although some
is Letting Update Journal, a consumer contracts are unaffected.
professional specialist lettings
publication for those who need to know the detail on court new legislation
cases, legislation and current professional practice. Published The regulations extend the right to a cooling off period, but only
quarterly by The Letting Centre and mailed directly to where the contract was made in or around a meeting which took
subscribers only, each issue includes regular features of interest place at the consumer’s home, place of work or the home of
to practitioners. another individual.
PROPERTYdrum has partnered with Letting Update Journal The new regulations will apply to most contracts made as a
and The Letting Centre to offer readers a unique opportunity to result of such a meeting. The contracts which may be excluded
subscribe to this specialist journal at a very special price. Further from the regulations are listed in Schedule 3 of the regulations.
details of this offer appear on the page following this feature and Tenancy agreements are clearly excluded in the legislation but it
you can take advantage of this by logging onto our website is less clear exactly how they might affect an Agency Agreement
www.propertydrum.com/subscribe. Here we have reproduced or Terms of Business. There may also be some situations where
a feature on Cancellation of Contracts from April 2009. the landlord is not considered a ‘consumer,’ then the Terms of
Business would be outside the legislation.
CanCellation of ContraCts
Stephen Fowler examines how the new regulations will affect requirements
property agents and their clients. Where a contract is subject to the regulations, the supplier must
give written notice to the consumer of their right to cancel the
New legislation came into force on 1 October 2008 extending contract within the cooling off period. This is a minimum of
consumers’ rights by providing the right to cancel a contract for seven days starting on the day on which the consumer receives
goods or services made during a visit by a trader, whether the the notice of the right to cancel.
visit is solicited or unsolicited. Tenancy agreements are excluded Where the contract is in writing, then the notice of the right to
but an agent’s Terms of Business are potentially covered. cancel must be set out in the original contract and include
certain information required by the regulations. The supplier
Client rights and proteCtion must also provide the consumer with a detachable document
When a business agrees to provide a service to a consumer, which they may use to cancel the contract within the cooling off
it enters into a legally binding contract (whether or not that period. The regulations prescribe the format and content of the
agreement is in writing), under which the consumer has detachable document.
important legal rights. For instance, the consumer (usually the
customer/client) is entitled to the service defined in the contract CanCellation
made with them or on their behalf. If the contract is cancelled by the consumer within the cooling
Under the Supply of Goods and Services Act a business must: off period the supplier can recover payment for any service
•
carry out the work with reasonable skill and care and supplied – but only if the consumer agreed in the contract to the
•
provide the service within a “reasonable” amount of time and commencement of work and payment of cancellation charges.
at a “reasonable” price, even if the contract is not specific.
There is no set definition of reasonable and the assumption is terms of Business
that the industry’s normal practice would apply. For agents this When a landlord, or someone on behalf of a landlord, instructs
means the accepted professional standards as set out by the an agent to provide letting and/or management services, the
professional bodies such as the RICS. parties enter into ‘Terms of Business’. This is a consumer
58 JULY-AUGUST 2009 PROPERTYdrum
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