Whats new? A snap shot of new legislation affecting Landlords, Tenants and Agents
Whilst 2014 has not seen the introduction of any groundbreaking Landlord and Tenant specific legislation bringing about wide ranging reforms, legislation has come into force in recent months that has brought about some subtle but important changes to the relationship between Landlords, Tenants and Agents. The purpose of this Article is to highlight the relevant legislation and changes now in force which may have overlooked.
Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013
In her excellent article " On-Premises and Off-Premises Contracts - Information Requirements", Rebecca Latus discussed the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 which came into force on 13 June 2014 ("the 2013 Regulations").
Whilst contracts for rental of accommodation for residential purposes are expressly excluded from the from the 2013 Regulations, the 2013 Regulations do apply to letting and sales agreements between agents and Landlords/property sellers who are acting in their private capacity.
The 2013 Regulations require a 'trader' - a letting or sales agent - to provide information to a 'consumer' - a Landlord or property seller. The extent of the information which must be provided, which may include details of the consumers right to cancel the contract, depends on where the contract is concluded and in particular whether the contract is an 'on premises' contract' or an 'off premises contract'. Rebecca's article addresses the distinction between on-premises and off-premises contracts and as such I do not propose to repeat the same here.
Consumer Protection (Amendment) Regulations 2014
The Consumer Protection from Unfair Trading Regulations 2008 (often referred to as "the CPRs") regulate cover commercial practices between traders and consumers. The Regulations in effect criminalise certain acts, omissions and aggressive commercial practices towards consumers.
Previously, tenants had no direct right of action against Landlords or their Agents who engaged in misleading tactics or aggressive practices, having to rely upon time consuming and complex claims based on misrepresentation and duress.
The Consumer Protection (Amendment) Regulations 2014 ("the 2014 Regulations") came into force from 1 October 2014 and apply to business or consumer contracts entered into, or payments made, on or after 1 October. The 2014 Regulations apply to private rental agreements between Landlords or Agents and Tenants and provide tenants with the right to pursue civil claims themselves against Landlord fouling fall of the CPRs.
Under the 2014 Regulations, a tenant subjected to such conduct will be able to pursue a civil claim to terminate a letting agreement and require the return of any rent and deposit paid up front, or to claim a discount or damages. It is important to note that where there has been a misleading omission, this of itself will not give rise to a claim.
The Redress Schemes for Lettings Agency Work and Property Management Work (Requirement to Belong to a Scheme etc) (England) Order 2014 No. 2359
Since 1 October 2014, anyone carrying on a business as a letting agent re-location agent or property management agent in England must be part of a government authorised redress scheme.
There are presently 3 schemes, being The Property Ombudsman, Ombudsman Services Property, Property Redress Scheme. The schemes, which play a role similar to that of an ombudsman, are intended to consider and determine complaints made against letting agents where the agent and the complainant have not been able to resolve a grievance between themselves.
It is a criminal offence for a letting agent not to be a member of one of the authorised scheme. Enforced by local authorities, letting agents commit a criminal offence punishable by a fine of up to £5,000 if they are not a member of one of the authorised scheme.
Each of the 3 schemes operate in much the same way. Where a complaint is referred to a scheme, the complaint will be reviewed and if determined to be of merit, the schemes can, amongst other remedies, require the agent to provide an apology to the complainant, order compensation be paid by the agent and expel an agent from the scheme. Where expulsion occurs, unless the agent is able to join another scheme, the agent will be unable to legally operate.
Linking to my earlier summary of the 2013 Regulations, in order to comply with those regulations, agents will need to provide the name and details of any redress scheme to consumers before any contract is entered into.
Immigration Act 2014
Whilst the relevant provisions of the Act are not in force across the country as yet, the Immigration Act 2014 paves the way for Landlord to be held responsible for ensuring that their tenant have the "right to rent" and appropriate immigration status to reside in the UK. For more details, see my recent Article " Immigration Act 2014 - Pilot Schemes for Tenant Identification Obligations"
This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.