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Contract law changes effect letting agents’ terms of business

By Eamonn Hogan on 25/08/2014 with comments

New regulations concerning the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 came into force on 13th June 2014 and will affect landlords who use letting agents. Although the new regime does not directly cover contracts for rental of residential accommodation, the new regulations do have a big impact on how a letting agent’s terms of business should be presented to the landlord.

The new regulations distinguish between three types of contracts:

  1. On Premises
  2. Off Premises
  3. Distance Contracts

With On Premises Contracts (i.e. contracts concluded/signed at a lettings agent's premises) the agent will have to give or make available the information set out in Schedule 1 of the Regulations. This does not necessarily have to form part of the terms of business document but the agent will need to be able to prove that the information was supplied in a clear a comprehensible form to the landlord.

With Off Premises Contracts (i.e. contracts negotiated and concluded in the physical presence of both the agent and the prospective tenant outside business premises) the agent must give or make available the information set out in Schedule 2 of the Regulations to the landlord. Again, this information need not be in the contract so long as proof that the information has been given in a clear and comprehensible form is kept. The agent must in addition give the landlord a printed cancellation form contained at Part B of Schedule 3 of the Regulations.

The implications of failing to give the required information for agents can be very serious and could mean that fees cannot be sued upon. Agents would be best advised to update their terms of business to make sure all of the information required and the notice of cancellation is included.