REsidEnTiallettings
Letting update
contract (unless the landlord is not a consumer, eg a business or tenancy agreement. Starting the tenancy earlier could mean a
limited liability company) and such an agreement should be in guarantor has the right to cancel after the tenancy has started.
writing and signed by the client prior to the commencement of It would be safer to make such agreements in the office or in an
any work. Regardless of what may be in the contract, the law exchange of correspondence.
infers certain terms and requires the contract to be in plain
English, in line with OFT guidelines. should agents amend theiR teRm of Business?
Most agency agreements include provisions for ending the These regulations could affect most agents who meet landlords
contract and most agreements run for a set, or extendable, away from the office. Where an agent takes Terms of Business to
period. However, it is not common practice for a letting agency’s an initial meeting and/or aims to close an instruction at such a
Terms of Business to provide a ‘cooling off period’. The law has meeting, the Terms of Business may need to be compliant with
now changed where the landlord is a consumer. the regulations. This means the terms of business must have a
Notice of Cancellation in a prominent and clear place,
RequiRements foR letting agents containing the information specified in Regulation 7. It must also
The regulations exclude tenancy agreements, but an agent’s have a detachable section for the landlord to return to the agent
terms of business may be covered by the new rules if the should he wish to cancel. If the agent intends to charge for
landlord is a consumer and where the contract is made: abortive work then this must also be set out in the notice.
•
(a) during a visit by the agent to the landlord’s home or
place of work, or to the home of another individual; consequences of a BReach
•
(b) during an excursion organised by the agent away from Any attempt to contract out of these provisions will be void in
his business premises; or law. Breach of the regulations is an offence in law and if found
•
(c) after an offer made by the consumer during such a visit. guilty an agent can be fined (currently up to £5,000 per offence).
This covers many situations where a contract is agreed at the These regulations will be enforced through Trading Standards.
landlord’s home, at the property to be let, or the home of Mercifully, the regulations provide scope for a defence of due
another. If that initial meeting concludes with the landlord diligence, where the agent can show reasonable mitigating
instructing the agent, even if no written agency agreement is circumstances. However, the advice to practitioners must be to
signed, there may be a contract and the new rules apply. carry out a review of procedures for market appraisals and to
In such circumstances the agent must have a term in the terms update their Terms of Business to ensure they comply.
of business giving notice to the landlord of the right to cancel
within the minimum period of seven days (including weekends
and Bank Holidays). Where an agent then writes to a landlord
with the letting terms, they must include a notice of the right to
There’s
cancel. The time for cancellation runs from receipt of the notice.
Where a consumer confirms instructions at the first meeting
only
but nothing is signed, the agent should indicate that written
terms will follow and will incorporate a right to cancel.
one At the
notice of the Right to cancel
The notice of the right to cancel is prescribed in Regulation 7
word
Letting Centre,
we have strived for
and must be given at the time the contract is made. Where the
contract is made after the initial visit the notice must be
for it
many years to produce
high quality tenancy
contained in the documentation that follows the visit. If the
agreements in plain
consumer wishes to exercise his right to cancel, he must do so
English. We avoid complex
within the notice period. Upon doing so the contract ends and
legal jargon and rambling
the parties revert to the position prior to the agreement.
legalese when simple and
The agent will be unable to recover any costs or fees incurred
direct wording will suffice.
unless he can show that the landlord authorised the work or
In short, we like to call
expenditure, notwithstanding the right to cancel. An agent
a spade a spade.
should not incur costs until the notice period has expired but
this may be difficult where the contract is not a sole agency.
guaRantoRs and guaRantees
A guarantee is also a consumer contract and is not specifically
excluded from the regulations. The guarantor may be entitled to
a cooling off period so guarantees should contain a right to
cancel where such an agreement is made with the consumer at
their home or workplace or away from the business premises.
In practice many guarantee agreements are made in other
No. 1 in Letting Information
ways, without even meeting the guarantor, but agents will need More information at: www.letlink.co.uk
to take care where the regulations do apply, ensuring there are or tel: Elaine Braidy on: 0845 3311224
seven days for cancellation prior to the commencement of the
PROPERTYdrum JULY-AUGUST 2009 59
Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76