CMA publishes consumer protection guidance for lettings industry
13 Jun 2014 03:34 PM
The Competition and Markets Authority (CMA) has
today published comprehensive guidance for lettings professionals to help
improve their understanding of, and compliance with, consumer protection
law.
The guidance follows the publication last year of a wide-ranging
report into the lettings market by the CMA’s predecessor, the Office of
Fair Trading (OFT), which raised concerns about a number of unsatisfactory
practices affecting tenants, including unfair and ‘surprise’ fees
and charges, poor service and delayed and substandard repairs. The OFT
considered that greater compliance with existing legislation would improve the
way the lettings market works.
The
result of constructive engagement with the lettings industry and other
stakeholders, this guidance will help lettings professionals to understand
their responsibilities under consumer and business protection regulations. The
CMA has worked closely with trading standards services to agree how the law
should be applied to the most problematic practices and to identify enforcement
priorities, so that together they can tackle non-compliance and improve the way
the market functions.
The
guidance includes practical advice such as:
- ensuring that tenants and the lettings agent’s
landlord clients know what charges and fees they will have to pay and what
these are for
- avoiding using misleading advertising or statements, and
ensuring that the tenant or landlord is given all the information they need, at
the appropriate time
- providing clear information which the tenant needs to
know before they move in (such as guarantor and deposit requirements, and the
terms and conditions of the tenancy agreement)
- dealing fairly and professionally with tenants and
landlords, and using fair contractual terms
- ensuring that services and repairs are carried out in a
timely manner and with reasonable care and skill
- giving clear and full information to tenants about how
to end a tenancy agreement
The
guidance is intended to complement existing and emerging industry schemes and
codes of conduct, and is relevant to lettings professionals in England, Wales,
Scotland and Northern Ireland, highlighting national variations in
legislation.
Nisha Arora, CMA Senior Director, Consumer,
said:
Renting a property is a big financial commitment, and it
is important that tenants can be confident that their landlord or letting agent
will treat them fairly. This guidance will help lettings professionals
understand how to comply with the law and should ultimately improve overall
standards in the market.
Notes for editors
- The
CMA is the UK’s primary competition and consumer authority. It is an
independent non-ministerial government department with responsibility for
carrying out investigations into mergers, markets and the regulated industries
and enforcing competition and consumer law. From 1 April 2014 it took over the
functions of the Competition Commission and the competition and certain
consumer functions of the OFT, as amended by the Enterprise and Regulatory
Reform Act 2013.
- Further information about the guidance can be found on
the publication page and the draft
guidance consultation response page, and details of the OFT’s review
of the lettings market and consultation with the industry can be found
on The National
Archives.
- The
guidance focuses on five pieces of UK wide legislation - The Consumer
Protection from Unfair Trading Regulations 2008 (CPRs), The Business Protection
from Misleading Marketing Regulations 2008 (BPRs), The Unfair Terms in Consumer
Contracts Regulations 1999 (UTCCRs), The Supply of Goods and Services Act 1982
(SGSA) and the Unfair Contract Terms Act 1977 (UCTA).
- The
CMA’s guidance is designed to help letting agents and landlords to comply
with their obligations under consumer protection law. The Department for
Communities and Local Government (DCLG) has produced a ‘How to rent’
guide for prospective tenants which gives an overview of their rights
and responsibilities. The CMA welcomes this publication as the lack of
understanding by tenants of their rights and responsibilities was identified by
the OFT’s Market Review of the Lettings Sector in February 2013 as one
reason why the market is not working as well as it should.
- DCLG is also working with the Royal Institution for
Chartered Surveyors (RICS) to develop a code for the management of residential
property in the private rented sector. The CMA’s guidance is intended to
complement industry codes of conduct, such as RICS’ Private Rented Sector
Code, which are a key means of driving greater compliance with consumer
protection law in the sector.
Media enquiries should be directed to Michael Rosen: 020 3738 6133 Follow CMA on Twitter