OFT launches new consultation on rules for lettings industry
In a second key move affecting letting agents, a new consultation was launched yesterday by the OFT. At its centre is the subject of fees.
The consultation is on draft guidance aimed at getting letting agents and landlords to comply with the law.
The guidance focuses on four pieces of 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); and the Supply of Goods and Services Act 1982 (SGSA).
Of these, CPRs have a new importance because they have replaced the Property Misdescriptions Act. The PMA did not apply to letting agents, but CPRs do, and they mean that letting agents must be scrupulous about preparing accurate property details and not omitting material factors.
The OFT’s draft guidance identifies trading practices that could breach legislation, such as not giving sufficient information to tenants about what fees they will have to pay, or making misleading statements about a property.
The draft guidance sets out the OFT’s views about how the legislation might apply at each step of the lettings process: from when agents first advertise their services, to the interactions they have with tenants prior to moving into a property, through to when a tenancy agreement comes to an end.
Cavendish Elithorn, executive director at the OFT, said: “The private rented sector is vitally important to millions of people, whether they are students, young professionals or families. Rental contracts can be the largest financial commitment some people have, and letting agent fees can be hundreds of pounds.
“Our earlier report into the lettings market found that both tenants and landlords were concerned about the clarity of communication from agents, including about fees and charges and poor service.
“Traders should always provide full disclosure of relevant information upfront, including a clear statement of the costs that will be incurred over the course of the rental. This guidance should ensure that businesses enable people to make decisions based on full information about the property and the agreement they are entering into, when they are looking to rent.”
The OFT said it welcomes comment from lettings professionals, tenants and other interested parties on the draft guidance. The consultation will close on December 10.
A copy of the draft guidance can be downloaded from:
OFT consults on draft guidance for letting agents and landlords
The OFT guidance, when finalised, will take precedence over the guidance to letting agents as to how they must disclose fees on their adverts, following a test case earlier this year when the Advertising Standards Authority banned an advert by Your Move. This new guidance is set to kick in on November 1 and agents have been warned that their advertising will be closely monitored.
Article courtesy of Letting Agent Today