Does the Consumer Rights Act 2015 apply to Tenancy Agreements?
Consumer Legislation in UK Tenancy Agreements
Consumer Protection for Tenants
Landlord as a Business:
Regardless of the number of properties owned, landlords are treated as businesses in the context of tenancy agreements, thus invoking consumer protection laws for tenants.
Tenants as Consumers:
Tenants are regarded as consumers, and therefore, they are afforded protections under consumer law. This applies to most residential tenancies, including in Wales where all Occupation Contracts are subject to consumer rules.
Consumer Legislation in Wales:
In Wales, the approach is similar, with Occupation Contracts being explicitly subject to these consumer rules, ensuring tenants' rights are safeguarded.
Protection for Landlords in Dealings with Letting Agents
Landlords as Consumers:
Landlords, particularly those who are not ‘professional’ landlords, are also protected under consumer legislation in their dealings with letting agents.
Transparency in Letting Agent Fees:
The Act requires full transparency about letting agents' fees, including the inclusion of VAT where applicable.
Right to Cancel:
Landlords (as consumers) have the right to cancel contracts with letting agents within 14 days if the contract was signed off-site, online, or via telephone, and if they weren’t informed about this right at the time of signing.
Limitations and Exclusions
The consumer legislation does not extend to tenants who are limited companies, as a company does not qualify as a consumer.
Landlords Operating Through a Company:
Similarly, landlords who own property via a limited company cannot take advantage of the consumer laws designed to protect individual landlords, particularly against burdensome clauses in agency agreements. This distinction is vital for landlords considering the structure of their property ownership.
Unfair Terms and Tenancy 'Unwinding'
Application of Unfair Terms Rules:
The Unfair Terms rules, now part of the Consumer Rights Act 2015, apply to all tenancies with the exception of Company Lets.
In certain situations, where landlords have acted unfairly, tenants may have the right to 'unwind' their tenancy. This can lead to the early termination of the tenancy and, in some cases, the refund of all payments made.
Advertising and Misleading Descriptions
Misleading Property Descriptions:
Landlords and agents must accurately describe properties in advertisements. Misleading descriptions can breach the Consumer Protection from Unfair Trading Regulations, potentially allowing tenants to 'unwind' the tenancy.
Property Redress Scheme Membership
Mandatory Membership for Letting Agents:
All letting agents must belong to a Property Redress Scheme, offering an accessible avenue for both landlords and tenants to lodge complaints.
In conclusion, the Consumer Rights Act 2015 plays a significant role in shaping the landscape of residential tenancies in the UK. It provides important protections for both tenants and landlords, particularly those dealing with letting agents.
Understanding these protections, and their limitations, is crucial for anyone involved in the UK rental market. Landlords should be particularly mindful of these rules and regulations when drafting tenancy agreements and managing their rental properties.