An Introduction to Consumer Law

a contract between a trader and a consumer is usually ‘one sided’. Consumer law is an attempt to address the imbalance to make things fairer to the consumer

Consumer rights

What is Consumer Law?

Consumer law is legislation which tries to redress the balance between the consumer and the trader.

Why is this necessary?  Well, traders / businesses tend to have more resources.  Their legal agreements will usually have been drafted by lawyers and they are usually in a stronger position than consumers.

Consumers will generally be ignorant of the law and are presented with the traders service or product on a ‘take it or leave it’ basis.   They rarely read legal contracts and often do not understand them even if they do read them. In any case they usually have no choice but to accept the traders terms if they want the product or service.

So therefore a contract between a trader and a consumer is usually  ‘one sided’.  Consumer law is an attempt to address the imbalance to make things fairer to the consumer.

Central to this is the concept of fairness – which often in a landlord and tenant context means not misleading the customer.  So for example (in the context of landlord and tenant law):

  • If a photograph of a property shows the property without any sign of the industrial warehouses which surround it on three sides – that’s unfair
  • If the property description says that the property is ‘quiet’ when in fact it is on the school run – that’s unfair
  • If the agents fees quote a figure which is exclusive of VAT (and therefore not the actual sum which the tenant will pay) – thats unfair
  • If the terms of the contract take away a right which a tenant would normally have – that’s unfair

Although landlords often see themselves just as ‘investors’, they are in fact providing a service to consumers and are therefore the target of much of this law.  Letting agents, being businesses, are a definite target.

Interestingly landlords are generally considered as consumers in the context of letting agent agreements but not in their dealings with tenants – who are invariably consumers.

The video clip below, taken from the footage of the Consumer Law Online Course, gives an example of consumer law and the doctrine of fairness in action, with an interesting discussion with David Smith talking about the fairness rules in the context of renewal fees.


 

 

Lets now take a look at some of the specific consumer legislation

Unfair Contract terms

Landlords and agents will often say things like “well the tenant signed the contract so now they are stuck with its terms’.

However in fact the tenant normally had no option but to sign the contract.  It was not a contract negotiated at arm’s length – as for example a business lease would be where both sides are represented by lawyers.

For many years we have had regulations which attempt to rectify this – they used to be the Unfair Terms in Consumer Contracts Regulations but they are now set out in Part 2 of the Consumer Rights Act 2015 but have not changed.

You can read about them in the Landlord Law Article on unfair terms in tenancy agreements.

Advertising

I talked above about misleading advertising. This is in breach of the general Consumer Protection From Unfair Trading Regulations.

David Smith explains this in the video clip below:

 

Agent Regulation

We do not have regulation of letting agents in the same way that we have regulation of solicitors, doctors and accountants (although many think that we should have).  However the following regulations provide some protection for consumers:

  • The fee transparency rules now set out in the Consumer Rights Act and which you can read about here.
  • The need for agents to sign up to a Property Redress Scheme – which you can read about here.
  • The codes of practice.  There are several, for example the codes for ARLA, RICS and the various Property Redress Schemes.  Most agents will be subject to one of these.

Distance and Off-site sales

These replace the old ‘Distance Selling Regulations’ but are more onerous.  They will apply to letting agent contracts with landlords but not to landlords letting to tenants – and short lets are specifically excluded.

Under the regulations, a trader who concludes a contract with a consumer after an off site meeting or via the phone or internet, must notify them of their right to cancel the contract within 14 days.

If this is not done, then the consumer can cancel the contract (and refuse to pay any fees under it) for up to 14 days after the trader finally notifies the consumer of their rights.

So if you have a problem with your letting agent and they have never notified you of your right to cancel – you may have a claim against them to recover any fees paid.

You can read more about this in the Letting Agent Dismissal Guide linked below.

HMO workshop

Related trails

“Dealing with Problem Letting Agents”

Help and Guidance.

The right to ‘unwind’ an agreement or tenancy.

This is where someone who has been induced to enter into a contract by some form of unfair practice can cancel the contract and apply to the courts for compensation.

Tenancy agreements are subject to this, again so long as the tenant was induced to enter into the tenancy because of some sort of unfair practice or misrepresentation (eg a misdescription of the property) which paid a significant part in the tenant’s decision to enter into the tenancy.

The tenant can withdraw from the tenancy and recover all fees paid if they do this during the first month of the tenancy.  If they withdraw after that but still within 90 days, they will have to pay for their occupation of the property but will be able to end the tenancy.

You can watch a clip from our Consumer Law Course below where David Smith explains this.

 

The Supply of Goods and Services

Protection for consumers contracting for services was previously covered by  the Supply of Goods and Services Act 1982 but is now dealt with in section 48 onwards of the Consumer Rights Act 2015.  This  requires businesses providing a service (eg a letting agent) to do this ‘with reasonable care and skill’.

An example of a case where this was done is discussed here where a landlord successfully claimed against an agent who had failed to reference tennats properly resulting in substantial financial losses in unpaid rent and damage to the property.

Conclusion

These are the main acts which deal with ‘consumer law’ for landlords and agents.  Almost certainly it is not a complete list and so I will be adding to this section and this article as time goes by.

There is also likely to be more such legislation in future as it is a developing area of law.

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